FHA and Treasury Cash Reserves 25

How much money will the FHA be taking from tax payers this year? Well, that’s a good question and one that’s probably going to be open ended for a long while. Let’s recap the facts for a second:

1) Last year the FHA needed $1.7 billion from the Treasury Department.

2) The FHA still backs over $1 trillion in loans so it’s still pretty risky.

3) Nearly 25% of loans were backed by the FHA during the housing crisis.

Add all of this together and I’d say the outlook is pretty grim. But some steps they’ve taken recently such as raising premiums and requiring payment of premiums throughout the life of the loan may be putting the FHA back on solid footing.

Still, only time will tell if this is going to be an upward trend in profitability for the government agency. I’d like to think it is and the FHA itself is claiming they will end the year with nearly $8 billion in reserves.

But experience has made us all a bit more cautious. Not when it comes to investing, of course. For that it’s more full-forward than ever before. But when it comes to relying on vague promises, that’s when you need to be suspicious. So trust your instincts, find deals, and learn from the experts. It’s what we all do so come join the fun!

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