FHA’s Bailout Refusal Raises Eyebrows

Despite the fact that the Federal Housing Administration is, by all accounts, having a difficult time holding onto its monetary reserves, the agency still maintains that it will not need to ask for any federal bailout money. This decision has been thoroughly questioned by many of the FHA’s longtime critics, many of whom wonder if the FHA is financially healthy enough to make such claims.
 
According to FHA Commissioner David H. Stevens, the surplus fund set aside to account for any unexpected mortgage losses backed by the FHA will dwindle below the stipulated amount required by Congress as early as October. While Stevens has admitted that the poor housing market has harmed the FHA, he states that the FHA still has $30 billion in cash to cover any future losses.
 
However, critics are pointing to the instability of the economy and the fact that the future remains very difficult to predict. By not taking any federal bailout money now, critics say, the FHA could be setting itself up to have to beg for bailout money in the future at a time when taxpayers may already have too much on their plate.

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