Will taxpayers have to bail out the FHA? Realtors and lenders have been relying on the FHA for the past year as the only source of financing for home buyers who have less than 20 percent down payments.
The Federal Housing Administration stepped up to guarantee low-down payment mortgages for riskier buyers after the mortgage market crashed. Now with many of them in default, the FHA’s losses have mounted, and it’s possible that its reserves will fall below the 2 percent level required by law. If that happens, taxpayers may have to bail out FHA.
Some housing analysts say that this will lead to even tighter restrictions on FHA mortgages, which could be disastrous for the housing market.
The 10 states with the most FHA-insured mortgages are: Texas, California, Florida, Georgia, Ohio, Illinois, Pennsylvania, Michigan, Virginia and North Carolina.
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