Bush Renews FHA Reform Effort

The Bush administration is renewing its efforts to pass a Federal Housing Administration reform bill, according to the president's budget proposal, which also calls for the FHA to charge risk-based premiums for its reverse mortgage, condominium, and 203(k) home improvement loan programs.The president's budget also proposes to merge those residential programs into the FHA single-family mutual mortgage insurance fund, which is self-sustaining and does not rely on appropriations to cover losses. "Under the Budget policy proposals, FHA will be able to set premiums that are based on risk and are sufficient to avoid the need for credit subsidy appropriations," according to budget documents released Feb. 5. Although the administration came up short last year, it is asking Congress again to pass legislation that would allow the FHA to insure single-family loans up to the $417,000 conforming loan limit and to charge risk-based insurance premiums.