HUD Issues 2020 Annual Report on FHA Mortgage Insurance Fund

HUD issued its Fiscal Year 2020 Annual Report on the status of the Mutual Mortgage Insurance Fund (MMI Fund), which is designed to hold sufficient funds to make the expected future payments needed to satisfy FHA’s single-family mortgage guarantees.

The MMI Fund currently has an overall capital ratio of 6.1%, an increase of 1.26% from the 4.84% capital ratio for FY 2019, and well above the minimum 2% capital ratio mandated by law.

In addition to forward mortgages, which make up the bulk of the mortgages covered by the MMI Fund, the MMI Fund is also used for claim payments on Home Equity Conversion Mortgages (HECMs).  The stand-alone capital ratio for just the HECMs covered by the MMI Fund also exhibited marked improvement, increasing by 8.44 percentage points, from negative 9.22 percent in FY 2019 to negative 0.78 percent in FY 2020.

In addition to listing various metrics and statistics about the MMI Fund, the report also discusses some of the steps the agency has taken to address the effects of the COVID-19 pandemic on the housing market and to aid borrowers who have been affected by the pandemic.