FHA Programs Removed From 'High-Risk' List

The Government Accountability Office has removed the Federal Housing Administration single-family insurance program from its list of "high-risk" government programs, citing the FHA's improved oversight of lenders.The GAO also removed the Department of Housing and Urban Development's rental housing assistance programs from the high-risk list, and it is the first time since 1994 that a HUD program is not on the list. HUD officials noted that the GAO's announcement shows that the FHA is on a "sound footing" as the Bush administration seeks legislation to modernize the FHA single-family program. However, the GAO noted that allowing the FHA to set risk-based insurance premiums and reduce its downpayment requirements means that HUD has to "manage new risks and accurately estimate the cost of program changes." The GAO can be found online at http://www.gao.gov.