Federal Housing Administration: Proposed Reforms Will Heighten the Need for Continued Improvements in Managing Risks and Estimating Program Costs

United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2006-06-20 monographic deposited born digital 21 p. GA 1.13:GAO-06-868T https://www.govinfo.gov/app/details/GAOREPORTS-GAO-06-868T P0b002ee18037eac0 f:d06868t DGPO 2010-08-12 2011-03-24 GAOREPORTS-GAO-06-868T machine generated eng fdlp REPORT GAOREPORTS-GAO-06-868T GAO-06-868T Housing programs Insurance premiums Mortgage programs Proposed legislation Risk management Cost estimates Program costs Testimony A55739

Federal Housing Administration: Proposed Reforms Will Heighten the Need for Continued Improvements in Managing Risks and Estimating Program Costs The Department of Housing and Urban Development's (HUD) Federal Housing Administration (FHA) has faced several challenges in recent years, including rising default rates, higher-than-expected program costs, and a sharp decline in program participation. To help FHA adapt to market changes, HUD has proposed a number of changes to the National Housing Act that would raise FHA's mortgage limits, allow greater flexibility in setting insurance premiums, and reduce down-payment requirements. Implementing the proposed reforms would require FHA to manage new risks and estimate the costs of program changes. To assist Congress in considering issues faced by FHA, this testimony provides information from recent reports GAO has issued that address FHA's risk management and cost estimates. Specifically, this testimony looks at (1) FHA's development and use of its mortgage scorecard, (2) FHA's consistent underestimation of program costs, (3) instructive practices for managing risks of new mortgage products, and (4) weaknesses in FHA's management of risks related to loans with down-payment assistance. https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-06-868T/html/GAOREPORTS-GAO-06-868T.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-06-868T/pdf/GAOREPORTS-GAO-06-868T.pdf GAO-06-868T https://www.govinfo.gov/app/details/GAOREPORTS-GAO-06-868T Testimony GAO-06-868T; Federal Housing Administration: Proposed Reforms Will Heighten the Need for Continued Improvements in Managing Risks and Estimating Program Costs; Housing programs Insurance premiums Mortgage programs Proposed legislation Risk management Cost estimates Program costs United States Code Title 12 Section 1711 12 U.S.C. 1711 United States Public Law 479 (73rd Congress) Public Law 73-479