HUD Raises Concerns About Changes to FHA Loans

STLToday.com (02/12/08); Crittenden, Michael R.
Despite widespread support for FHA reform, the Bush administration and congressional legislators continue to butt heads over the best strategy to revamp the agency. Just this week, HUD Secretary Alphonso Jackson dispatched a letter warning Congress that certain proposed changes could financially hamstring the FHA—specifically, resistance in the House and Senate to FHA's push for greater flexibility in setting premiums. The agency wants the authority to impose higher fees on riskier borrowers while charging lower costs to low-income borrowers who have relatively good credit. Without that relationship between risk and premium level, Jackson insists that "FHA becomes a full-fledged subsidy program."