Budget Rules Don't Reflect Actual Cost of FHA Mutual Mortgage Insurance Program, CBO Says

摘要

FHA home loans insured under the Mutual Mortgage Insurance Fund (MMIF) actually cost the government about 2 to 5 percent of the amount of mortgages insured each year, according to the Congressional Budget Office (CBO), even though budget rules show the program is a money maker. Under the Federal Credit Reform Act (FCRA), which governs budget calculations for federal loan guarantee and insurance programs, the subsidy cost of a loan program is the net present value of the government's projected cash flows from loans insured or guaranteed in a fiscal year, with the costs of defaults offset by loan fees or premiums and recoveries from property dispositions. Administrative costs, which are recorded as they are paid, are excluded from this calculation.