Galante Says FHA Won't Need Another Draw from Treasury
The Federal Housing Administration will not need further assistance from the U.S. Treasury as the financial condition of the agency's insurance fund continues to improve, FHA Commissioner Carol Galante said Thursday.
"One thing is clear, we will not need a draw," Galante, who will step down later this year, said at a housing forum in Sun Valley, Idaho.
Last year, FHA needed a $1.7 billion draw from Treasury after ending fiscal year 2013 with a negative net worth of $7.8 billion.
Galante acknowledged that some critics are "not happy about" the FHA's high mortgage insurance premiums, but she noted that the pricing is helping to aid the insurance fund's recovery.
Premiums are "covering the cost of the risk we are taking on plus building our capital reserves back," she said at the event sponsored by the Bipartisan Policy Center.
But Galante also signaled that more affordable FHA financing could be coming as the agency recovers.
"Now it is time to look at what we do in terms of access of credit as our countercyclical role fades and as our financial situation becomes better," she said.
Galante said an actuarial report on the FHA's finances due out in November will show "we are doing much better today." A report released earlier this month already shows improvement, with the rate of seriously delinquent loans falling to its lowest level since November 2008.
Galante recently announced she will leave FHA to become a professor at the University of California-Berkeley.