This month, HUD urged Congress to allow them more flexibility when pricing FHA loans. Business Week explains:
“The Department of Housing and Urban Development warned U.S. lawmakers Monday that the Federal Housing Administration could face financial difficulty if Congress limits its ability to charge higher premiums to riskier borrowers.
“FHA will move ever closer toward financial insolvency, given the uncertainty and volatility in today’s mortgage market if forced to continue its current premium structure,” HUD Secretary Alphonso Jackson said in a letter sent Monday.”
HUD wants the freedom to raise rates for risky-borrowers. Congress, on the other hand, says they’re promoting housing availability by limiting the amount FHA borrowers can be charged and keeping down payment minimums low.
If you’re an owner-occupant bidder, securing FHA-insured financing is a smart way to save money (and even take out money for repairs in the case of the 203(k) loan). See: Secrets of HUD Foreclosures.