WASHINGTON (Reuters) – The U.S. Federal Housing Administration will raise fees and implement other "aggressive measures" so it may not need taxpayer money to cover a projected deficit for the first time in the agency's nearly 80-year history.
The mortgage insurer could avoid drawing funds from the U.S. Treasury even if President Barack Obama's budget blueprint due out next month projects the FHA being overwhelmed with losses and short on capital, FHA Commissioner Carol Galante said in remarks prepared for a congressional hearing on Wednesday.
The agency does not have an immediate need for cash and will "be diligent in taking every action appropriate to protect taxpayers while continuing to ensure that FHA supports the stabilization of the housing market," Galante said in her testimony to the House of Representatives Financial Services Committee.
FHA is raising fees it charges borrowers and tightening credit standards for loans it insures, she said. Those steps will help the agency avoid tapping taxpayer funds and could be enough to offset any losses the White House budget plan shows.
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