Author: Karl Howley

Blog: Private Mortgage Insurance: A Powerful Tool To Buy A Home That Has Declined In Cost

Posted on by Karl Howley

Private mortgage insurance is a powerful tool to buy a home that helps borrowers become homeowners with tens of thousands less at the closing table and without having to save for a 20% down payment. Private MI paid monthly by the borrower is a temporary cost that represents a small component of the total cost of homeownership. What’s more, private MI has declined in cost in recent years. Unlike other costs associated with homeownership that have increased significantly, such as homeowners insurance, property/real estate taxes, average household utilities, and the amount of money needed for a down payment, the cost of private MI has decreased by 25% based on in-force premium yields. See here or below for USMI’s new infographic detailing this striking difference!

 

Blog: New Analysis Demonstrates It’s Time to Modernize FHA’s Capital Ratio

Posted on by Karl Howley

Since 1990, the Federal Housing Administration (FHA)’s taxpayer-backed Mutual Mortgage Insurance Fund (MMIF) has been required by statute to maintain a positive economic value of 2% going forward to help cover any unexpected losses – a requirement often referred to as FHA’s 2% Capital Ratio. That was 35 years ago, and a lot has changed since then – including the Great Financial Crisis and updated, risk-based capital frameworks developed in its aftermath to ensure the housing finance system remains strong and resilient in the face of stress events. However, despite these significant changes, the 2% Capital Ratio remains the same to this day.

In the coming weeks, FHA will release its annual report to Congress detailing the financial status of the MMIF as of the end of the fiscal year.  Every year, FHA provides an annual report to Congress on its fiscal condition. To help enhance transparency around the true fiscal condition of the MMIF and FHA’s forward mortgage program and contextualize these numbers, USMI commissioned Milliman, a third-party actuarial firm, to estimate the risk-based capital FHA would be required to hold if subject to the same capital frameworks as private mortgage insurers and the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac.

Milliman found that, if held to the same capital standard (PMIERs) that private mortgage insurers must meet to insure loans acquired by the GSEs in the conventional market, FHA would run a $31.7 billion shortfall. Similarly, FHA would need to hold $50 billion more to meet the GSE capital framework’s minimum requirement if applied to FHA’s book of business.

FHA is designed to enable access to homeownership for borrowers who may not qualify through traditional underwriting and plays an important countercyclical role in America’s housing finance system. It must remain strong and well-capitalized to perform these critical functions. After 35 years, Congress should consider replacing the 2% Capital Ratio requirement with an updated stress-based, loan-level risk-weighted standard that would ensure FHA has sufficient capital to meet its obligations during a time of severe stress, similar to how the GSEs and the private MI industry have built safeguards to ensure sufficient capital levels to withstand downturns.

Read our full policy brief here to learn more about why policymakers should consider modernizing FHA’s Capital Ratio to preserve safety and soundness in the housing finance system.

Op-Ed: Homeownership for working families is about to get more affordable

Posted on by Karl Howley

USMI President Seth Appleton authored an opinion piece in the Western Journal on the reinstatement and permanency of the mortgage insurance (MI) premium tax deduction as part of President Trump’s One Big Beautiful Bill Act and the benefits that American families will soon see from the provision. “Americans previously used the deduction 44 million times for combined deductions of $65 billion. In the last year it was available, taxpayers received back an average of more than $2,300. For middle-class families, that’s real money — enough to cover monthly bills, put food on the table, or help with school expenses for the kids. Thanks to the One Big Beautiful Bill Act, that tax relief is now back for good,” wrote Appleton.

Appleton added: “The impact of this deduction can be substantial. In 2024 alone, more than 800,000 Americans purchased homes with the help of private mortgage insurance. Nearly two-thirds were first-time buyers, and many earned under $75,000 a year. These aren’t Wall Street investors — they’re teachers, nurses, police officers, and young families finally getting their foot in the door of homeownership… The restoration of the mortgage insurance deduction means homeownership is now closer within reach for millions of families. It is a concrete win at a time when Americans are eager to see results from Washington. That’s good news for working families — and it’s worth celebrating.”

Read the full piece here.

Letter: FHFA Repeal of the Fair Lending, Fair Housing, and Equitable Housing Finance Plans

Posted on by Karl Howley

On September 25, 2025, USMI and its member companies provided feedback on the U.S. Federal Housing’s (FHFA) Notice of Proposed Rulemaking (NPR) repealing its “Fair Lending, Fair Housing, and Equitable Housing Finance Plans” regulation. USMI strongly supports FHFA’s work to reduce unnecessary regulatory burdens and believes FHFA’s proposal to repeal this regulation aligns with this work. USMI’s members are key partners to the GSEs, and we look forward to continued collaboration in helping low down payment borrowers affordably and sustainably achieve homeownership sooner in the conventional market. Read the full letter here.