The Public Purpose of FHA
Posted: 11 Aug 2016
Date Written: 2013
Recent reviews of the Federal Housing Administration’s Mutual Mortgage Insurance (MMI) Fund find that the losses on its portfolio are projected to exceed the revenue from its existing insurance policies and its current capital resources. This article places the MMI Fund’s “negative economic value” and recent draw on the U.S. Treasury in context and argues that the justification for federal mortgage insurance is the public purpose it serves by filling gaps the private sector leaves, thereby contributing to a healthy and stable housing market.
Keywords: Federal Housing Administration, mortgage, insurance, Great Recession
JEL Classification: G21, G22, G28, R30
Suggested Citation: Suggested Citation