FHA:The Next Bailout

The Federal Housing Administration (FHA) is in deep trouble. After tripling the size of its insurance to $1 trillion in the past four years, it’s now balancing an extremely leveraged portfolio with a dangerously small cash cushion. Unless the economy makes a swift recovery, my research shows that FHA will need a massive taxpayer bailout—between $50 and $100 billion. If the economy turns down for any reason, even more funds would be needed.