Federal Housing Administration | featured news

The Federal Housing Administration, which has played a crucial role in stabilizing the housing market, said it ended September with $16.3 billion in projected losses -- a possible prelude to a taxpayer bailout.

...Critics worry that the FHA is foolishly allowing marginal buyers to get loans just three years after foreclosure with as little as 3.5% down. What's more, the agency doesn't even track how many rebound borrowers it backs. Exactly how much money is hemorrhaging from the agency could be revealed Thursday, when the agency files a self-evaluation report to Congress. Analysts say the FHA could request a bailout from the U.S. Treasury for the first time in its history.

The Federal Housing Administration's cash reserves have dropped so low that there is a close to a 50 percent chance it could run out of funds and may require a taxpayer bailout next year, the Wall Street Journal said, citing an annual independent audit of the agency's finances.

Consumers looking for home loans backed by the Federal Housing Administration will face tougher hurdles and higher costs under new legislation and new rules that could take effect as soon as this month.