Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

If FHA has existing statutory authority to risk-base its premiums, why did it request legislation for risk-based premiums?

April 26, 2017authority existing FHA legislation premiums request risk-based statutory

0

Posted

If FHA has existing statutory authority to risk-base its premiums, why did it request legislation for risk-based premiums?

1 Answer

0

Posted

While FHA does have authority to risk-base its premiums, the Administration’s bill makes explicit that FHA will charge a premium commensurate with the risk. The Administration asked for legislation to remove the existing premium caps in order for FHA to serve some borrowers it otherwise cannot, i.e., those who represent greater risk than could be borne by the existing maximum premiums. However, in the absence of that legislation, FHA elected to develop a risk-based premium structure based on existing statutory authority.