The Federal Housing Administration has grown so large that by the end of
this year it will guarantee mortgages for 3 in 10 U.S. borrowers, many of
whom
have bad credit or loans that required no verification of income.

Congress wants FHA to do more. The Hope for Homeowners program (H4H)
unveiled Oct. 1, authorizes the FHA to guarantee up to $300 billion of
30-year,
fixed rate home loans for struggling borrowers over the next three years.

The Congressional Budget Office estimates that 400,000 households will
get FHA- insured loans.

“FHA has completely replaced subprime and Alt-A,” said David Olson,
former director of market research at Freddie Mac.

Now only Fannie Mae is involved in a higher percentage of U.S. mortgages.

FHA’s growth mirrors the explosion in mortgage lending during the ho using
boom.

Credits
Bloomberg
Peter G. Miller