Group warns underfunding FHA, Ginnie Mae risks housing stability
The Community Home Lenders Association (CHLA) has called on Congress to increase funding for the Federal Housing Administration (FHA) and the Government National Mortgage Association (Ginnie Mae).
The association said that adequately funding these agencies is essential for ensuring affordable housing and homeownership opportunities for millions of Americans, particularly first-time and low-to-moderate-income buyers.
“Both Ginnie Mae and FHA play a critical role in affordable and equitable access to homeownership, particularly for first-time and low-to moderate-income borrowers,” CHLA executive director Scott Olson said in a statement. “Securing increased funding for these critical agencies will better help them execute on their mission to serve borrowers, proactively work on initiatives in a fiscally responsible way, and collaborate with the private market lenders that make homeownership possible for millions of Americans.”
In a letter to congressional leaders, CHLA advocated for higher Senate funding levels for the agencies’ salary and expense accounts for fiscal year 2025. The association requested $67 million for Ginnie Mae (compared to $54 million in the House bill) and $505.7 million for FHA (compared to $487.55 million in the House bill).
Ginnie Mae guarantees securities backed by FHA, Rural Housing Service (RHS), and Veterans Affairs (VA) loans. In 2023, the agency supported over 1.2 million households, including 630,000 first-time homebuyers.
“We request the higher Senate level of $67 million be adopted in the final conference report,” the letter read. “The difference between the two bills is relatively small, in relation to the FY 2025 budget projection that Ginnie Mae will generate approximately $1.4 billion in profits (negative credit subsidies) next year.
“However, the higher level is important, because it is essential that Ginnie Mae has the resources and staff the agency needs to fulfill its responsibilities and focus on its core mission, including marketing Ginnie Mae securities to global investors and conducting oversight of the 300-plus companies that issue Ginnie Mae securities backed by FHA, RHS, and VA loans.”
CHLA also noted that the FHA insured nearly 767,000 single-family mortgages in 2023, with nearly 500,000 going to first-time homebuyers. It remains a critical resource for borrowers who may struggle to qualify for conventional loans due to limited savings or minor credit issues.
The FHA’s Mutual Mortgage Insurance Fund reported a strong capital level of $172.8 billion in FY 2024, with a capital ratio of 11.47 – well above required levels. The additional funding requested by CHLA would allow the FHA to continue its mission, including setting fair premiums, supervising approved lenders, and managing its extensive loan portfolio.
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“The Senate THUD appropriations bill set funding at $505.7 million and the House bill at $487.55 million. The FY 2025 budget requested $509 million for this account,” the letter noted. “We request the higher level of $505.7 million be adopted in the final conference report.
“The difference between the two bills is relatively small, in relation to the FY 2025 budget projection that FHA forward mortgage loans will generate approximately $4.444 billion in profits (negative credit subsidies) next year.”
CHLA’s push for higher funding comes as Congress debates whether to pass a short-term Continuing Resolution or finalize FY 2025 appropriations. The organization warned that underfunding FHA and Ginnie Mae could hinder their ability to manage risk effectively and support the broader housing market.
“We recognize the need for fiscal restraint as deficits grow. Yet, both of these agencies generate funds that serve as an offset for their own and other government programs, and, therefore, providing these programs the funding needed to properly manage risk and operate efficiently would both enhance their ability to carry out their mission and reduce the chances of program risks creating greater costs down the road,” CHLA wrote.
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