WASHINGTON — The Federal Housing Administration forward mortgage program is "doing extremely well," and recent changes to its reverse mortgage program “will stop the bleeding” in losses to the agency, Housing and Urban Development Secretary Ben Carson said Thursday.
Speaking at a House Financial Services Committee hearing, Carson said the FHA fund is “very close” to its statutory 2% minimum but performing adequately. He said the agency has delayed making any major changes to the program while it waits for the nomination and confirmation of key appointments.
"It has been a real ordeal getting people into place," Carson said.
President Trump recently nominated Brian Montgomery to serve as the new FHA commissioner, a post he held during the George W. Bush administration.
But HUD is still waiting for the White House to send his nomination papers up to the Senate Banking Committee.
One of the big questions likely to fall to Montgomery is whether to cut FHA premiums. Shortly before President Obama's term ended, HUD proposed to cut the FHA's annual insurance premium by 25 basis points to 60 basis points. But the Trump administration put that cut on hold so it could study that issue.
Rep. Brad Sherman, D-Calif., asked Carson about the status of the annual premium cut and whether FHA will stop charging such premiums after the homeowner reaches 22% equity in the property.
"Both of those things are under study," Carson said. "I personally don’t want to make a commitment on either of them right now because we are so close to having an FHA commissioner."
Rep. Blaine Luetkemeyer, R-Mo., also asked Carson about that the status of a HUD proposal to streamline rules for condominiums. HUD issued the proposal in September 2016.
"We are coming down the home stretch on that," he said. "That is very important, because a condo purchase is frequently the first step in homeownership.”
Meanwhile, Democrats are warning Carson that they will not stand by if the Trump administration plans to cut funding for key housing programs for low- and moderate-income renters, such as the Community Development Block Grant program.
The CDBG program has broad bipartisan support, according to Rep. David Scott, D-Ga. "You would do well to stand up to this administration," Scott said.