FHA’s latest actuarial report clocks the MMI Fund capital ratio at 2.76 percent, with close to a 4% capital ratio for the single-family program swamped by a startling negative 19% ratio for HECMs.  However, the main reason the MMI Fund did so well despite ongoing HECM woes are a better economic assumptions that, even more optimistically than the 2017 projections, project a rosy housing market in a sound U.S. economy for years to come.  Even if one concurred, details about FHA’s risk, especially outside HECMs, give us — and, it seems now also FHA — considerable pause.

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