) insurance fund will gain at a slower pace over the next two years.
Amid the announcement of FHA mortgage insurance premium cuts
, the White House predicted the insurance fund will grow by more than $7 billion per year during the next two years after gaining $21 billion in value over the prior two years combined, according to the Wall Street Journal.
In January, Obama addressed new housing initiatives
, including lowering FHA rates, winding down Fannie and Freddie and continuing to crack down on shoddy lending practices. The cut drops the FHA mortgage insurance premium from 1.35% to 0.85%.
Republicans have said premium cuts should be off the table because the agency’s insurance fund remains below the legally required level of 2%.
House Financial Services Committee Chairman Jeb Hensarling said in December that “a broke FHA is a broken FHA.”
The FHA is required to keep enough cash to cover all projected losses in its $1.1 trillion portfolio. A recent report released by the agency
estimated that the insurance fund won’t return to the congressionally mandated 2% threshold until 2016.
Obama's proposed budget also includes a bump in the Department of Housing and Urban Development’s (HUD) current funding levels in its 2016 fiscal year. HUD is requesting an increase of nearly $4 billion
, which would amount to $49.3 billion.
“HUD is the Department of Opportunity and the President’s budget proposal is a blueprint for greater opportunity for all Americans,” Secretary Julián Castro said in a statement. “By increasing our department’s funding level by nearly $4 billion over current levels, the President’s budget helps us continue our progress toward achieving our mission to promote homeownership, support community development – including making neighborhoods more resilient from natural disasters – and expand access to affordable housing for all.”
U.S. President Barack Obama’s proposed budget shows that the Federal Housing Administration’s (