With over 1.2 million mortgages insured, the Federal Housing Administration (FHA) looks like it’s headed for financial problems; and the Obama administration is hoping it won’t result in a bailout. The FHA currently supports around 15 percent of U.S. home loans, which is down from 30 percent in 2008.
At a possible deficit of $16.3 billion, the FHA says they might need taxpayers to pitch in for the first time in 78 years. However, the steady incline in the housing market should improve the agency’s long term outlook. The FHA also says with a few changes, it could generate about $11billion in addition revenue by the end of 2013.
Decisions about the bailout won’t be made till September and because of the improving housing market and possible changes taxpayer aid might not be needed.
For more information check out this LA Times articles: http://www.latimes.com/business/money/la-fi-mo-fha-bailout-federal-housing-administration-20121116,0,2518680.story