Posted: Sep 18, 2009 10:21 AM by Alan Zibel
The Federal Housing Administration says its cash cushion will dip below mandated levels for the first time, but insists it won't need an immediate taxpayer rescue.
The agency, a growing source of funds for first-time homebuyers, faces mounting concerns that it will soon need a taxpayer bailout as losses grow from homeowners who lose their jobs and can't pay their mortgages. Federal law requires the agency to have 2 percent more cash than its expected losses for the next 30 years.
The FHA says a study being sent to Congress in November is expected to show that ratio dipping below required levels for the first time.
The agency now insures about 5.3 million mortgages, up from about 4 million three years ago.