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60 e Federal Housing Administration (FHA) has released its Annual Report to Congress on the Status of the Mutual Mortgage Insurance Fund (MMI Fund or "the Fund"), the agency's fiscal year actuarial review, and once again, the Fund showed an improved financial position for FHA over the prior year. Despite headwinds for the U.S. economy, with October wholesale prices rising 8.6% year over year, tied for the highest ever, along with the deceleration of real GDP in Q3, a strong housing market and robust home price appreciation have boosted MMI Fund Capital to over $100 billion, increasing from last year by $21.5 billion. e capital ratio of the Fund improved to 8.03%, a 1.93 percentage point improvement over 2020, which was the highest level since 2007. Both MMI Fund Capital and MMI Fund Capital Ratio are at historic highs. is is welcome news for FHA, especially given the fate of 660,000 FHA borrowers who are seriously delinquent (nearly 400,000 still in COVID-19 forbearance plans) remains uncertain. Many of those borrowers have and will use FHA's home retention tools available to them and hopefully have a soft landing as they return full-time to the workforce. Borrowers unable to find employment potentially face an uncertain road ahead, since a successful home retention outcome is increasingly more difficult without full-time employment that provides a stable income source. A key question accompanying the strengthened financial position of FHA for HUD leadership will be what happens to FHA mortgage insurance premiums (MIP). Earlier this year, Secretary Marcia Fudge planted a flag when she said FHA premium cuts were not on the table. With the improvement in the Fund's position once again, there is sure to be increased pressure from some FHA stakeholders to lower premiums in the name of relief to borrowers. While Secretary Fudge is focused on increasing affordability of FHA financing, she is also looking to expand financing "for small- dollar mortgages in low-cost markets" and "expanded homebuyer assistance," to "create opportunities for homeownership to a greater number of well-qualified borrowers of modest means." As Secretary Fudge and FHA balances these important goals, it is necessary to unpack for a moment the significance of the premiums FHA collects and the claims it later pays. As the MMI Fund Report points out, FHA's MMI Capital is in part a buffer "against adverse shocks and financial events during Feature By: Brian D. Montgomery and Keith Becker INDUSTRY VETERANS URGE CAUTION FOR FHA In this exclusive op-ed, industry/government veterans Brian D. Montgomery and Keith Becker make the case that FHA should resist the urge to reduce premiums while economic uncertainties and the fate of serious delinquencies remain.