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ExpectMore.govExpectMore.gov home pageEXPECT FEDERAL PROGRAMS TO PERFORM WELL, AND BETTER EVERY YEAR.
 
Program Assessment

Program

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FHA Single-Family Mortgage Insurance

The Federal Housing Administration (FHA) insures private FHA-approved lenders against losses from default on single-family mortgages they issue. The program's purpose is to expand homeownership opportunities for first-time and minority homebuyers.

Rating

What This Rating Means

PERFORMING
Adequate

This rating describes a program that needs to set more ambitious goals, achieve better results, improve accountability or strengthen its management practices.
  • The program is meeting its statutory objective to underserved borrowers. In 2004, 73 percent of FHA insured loans were to first time homeowners, and 37 percent were to minority homebuyers.
  • The program lacks quantifiable annual and long-term performance goals which measure FHA's ability to achieve its statutory mission.
  • The program's credit model does not accurately predict losses to the insurance fund, nor can FHA demonstrate its ability to reduce fraud in the program.

Improvement Plan

About Improvement Plans

We are taking the following actions to improve the performance of the program:

  • Incorporating more data from the underwriting process into the cash flow modeling to more accurately predict claim rates.
  • Modifying downpayment source categories to include nonprofit seller and non seller-funded categories and requiring lenders to report this information to HUD and appraisers.
  • Establishing quantifiable annual and long term performance goals and efficiency measures that are higher than actual experience to date.

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