Massachusetts Home Buyer Guide

A federal fund used to support the Federal Housing Administration's (FHA) single-family mortgage and reverse mortgage insurance programs ended fiscal year 2012 with a $16.3 billion deficit, according to an annual report submitted to the United States Congress this month, Inman News reported November 16, 2012.

Since the demise of the so-called sub-prime lenders around 2007, the FHA home loans have been the mortgage financing of choice for consumers with small down payments and lower credit scores. 

To stem the red ink, the FHA will raise annual insurance premiums, sign off on more short sales, streamline sales of foreclosed properties, offer "deeper levels" of payment relief through its loss mitigation program, expand sales of delinquent loans, and, for new loans, reverse a policy instituted in 2011 that canceled required premium payments after loans reached 78 percent of their original value.

In 2013, the FHA plans to raise the annual insurance premium paid by borrowers on an FHA loan by 10 basis points, or 0.1 percent, which is expected to add about $13 a month to the average borrower's monthly payments.

Is there yet another taxpayer bailot on the horizon?