FHA chief says no bailout is needed

10/9/2009 | Washington Post, The

The Federal Housing Administration "will not need a bailout," Commissioner David Stevens told a House panel Thursday after former Fannie Mae executive Edward Pinto had said the FHA could require a bailout in 24 to 36 months. The FHA has stated that an audit, to be released shortly, will show that its reserve fund has fallen below the level required by law, meaning it would not be sufficient to cover 2% of all outstanding FHA mortgages. But Stevens said there is another fund the agency can use, and, in total, the two funds had $30.4 billion on tap as of June 30. Stevens added that reserves will be recapitalized as the economy improves.

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