Statement: FHFA Announcement Regarding Credit Score Implementation and Timing

WASHINGTON Seth Appleton, President of U.S. Mortgage Insurers (USMI), issued the following statement on the Federal Housing Finance Agency’s (FHFA) announcement of the next phase of the public engagement process for the updated credit score requirements for loans acquired by Fannie Mae and Freddie Mac (the government-sponsored enterprises or GSEs):

“USMI applauds FHFA and Director Thompson’s responsiveness to concerns regarding the implementation of new credit score models and credit report requirements for mortgages acquired by the GSEs. The private mortgage insurance (MI) industry has served as an accessible route to homeownership for millions of home-ready borrowers over the past 66 years, and USMI’s members welcome robust engagement with FHFA, the GSEs, lenders, and other industry stakeholders to ensure a smooth implementation that promotes efficient market operations, supports borrowers’ continued access to mortgage financing, and protects taxpayers from undue credit risk.

“USMI looks forward to participating in the forthcoming forums and listening sessions to collaborate with policymakers and stakeholders to address issues, challenges, and opportunities associated with the implementation of new credit score requirements. As part of the expanded public engagement process, USMI encourages FHFA to direct the GSEs to release loan-level data for Classic FICO, FICO 10T, and VantageScore 4.0 to allow for comprehensive analysis and work toward a smooth transition and achievable timeline that minimizes costs and complexity.”

In May, USMI submitted supplemental comments and recommendations to the GSEs’ Credit Score Industry Engagement Survey to work towards facilitating a smooth transition to new credit score requirements. Additionally, in late June, USMI joined a coalition of industry trade associations and consumer advocate groups in sending a letter to advocate for adjustments to the implementation plan that would increase transparency, stakeholder feedback, and industry analysis of data related to the adoption of the FICO 10T and VantageScore 4.0 credit score models, as well as the new bi-merge credit reporting policy by the GSEs.


U.S. Mortgage Insurers (USMI) is dedicated to a housing finance system backed by private capital that enables access to housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at

Letter: Joint Letter to the FHFA on Credit Score Implementation

USMI joined a coalition of industry trade associations and consumer advocate groups in sending a joint trade letter to the Federal Housing Finance Agency (FHFA) in response to the agency’s March 23 announcement regarding the implementation plan for the adoption of the FICO 10T and VantageScore 4.0 credit score models, as well as the bi-merge credit reporting policy, by Fannie Mae and Freddie Mac. The coalition recommends that the credit score policy implementation plan should be adjusted to include a comprehensive, transparent, and iterative stakeholder engagement process, as well as robust data transparency, specifically including the release of long-term historical datasets for Classic FICO, FICO 10T, and VantageScore 4.0. The organizations also call for the FHFA to provide a recalibrated timeline that accommodates data analysis and modeling, as well as stakeholder feedback on the costs, complexity, consumer impact, and policy implications of the transition. Click here to read the letter.

The letter’s signatories include:
American Bankers Association, Center for Responsible Lending, Community Home Lenders of America, Consumer Bankers Association, Credit Union National Association, Housing Policy Council, Independent Community Bankers of America, Leading Builders of America, Mortgage Bankers Association, National Association of Federally-Insured Credit Unions, National Association of Home Builders of the United States, National Association of REALTORS®, National Housing Conference, Reinsurance Association of America, Securities Industry and Financial Markets Association, and Structured Finance Association.

Letter: Joint Trade Letter to FHFA on Proposed Enterprise Regulatory Capital Framework (ERCF)

USMI joined a coalition of housing finance organizations including the American Bankers Association (ABA), Housing Policy Council (HPC), and the Independent Community Bankers of America (ICBA) in responding to one element of the Federal Housing Finance Agency’s (FHFA) Notice of Proposed Rulemaking (NPR) on enhancements to the Enterprise Regulatory Capital Framework (ERCF). The organizations raised concerns regarding the method of calculating a borrower’s representative credit score once the government-sponsored enterprises (GSEs) migrate to the bi-merge credit report requirements. The coalition recommends that loan-level GSE data from 1999 forward should be published sooner than 4Q 2023 to allow for the necessary analysis and impact assessment ahead of the proposed implementation in 1Q 2024. In addition, the organizations call for FHFA to work more closely with the industry to fully assess operational and regulatory compliance considerations for mortgage market participants, including for the notices and disclosures required under the Fair Credit Reporting Act (FCRA). Click here to read the letter.

Press Release: USMI Names Seth Appleton as President

WASHINGTON — U.S. Mortgage Insurers (USMI), the association representing the nation’s leading private mortgage insurance (MI) companies in an industry with $1.5 trillion of insurance-in-force, today announced that Seth Appleton, the President of the Mortgage Industry Standards Maintenance Organization (MISMO), will serve as the association’s new President starting in January 2023. Appleton currently serves as co-chair of the Bipartisan Policy Center’s Housing Council and previously served as Assistant Secretary for Policy Development and Research at the U.S. Department of Housing and Urban Development (HUD), a position for which he was confirmed unanimously by the U.S. Senate.

Appleton is a seasoned legislative, regulatory, and public policy professional with a track record of working across the aisle to deliver results, as proven by his role in helping to pass reauthorization legislation that reformed housing policies for the first time in decades and was unanimously passed by a Republican-led Congress and supported and signed into law by President Obama.

“With a deep knowledge of the mortgage industry and a proven record of bipartisan advocacy, Seth is the right leader to promote the mission of the private mortgage insurance industry in helping first-time homebuyers achieve the American dream of homeownership,” said Adolfo Marzol, USMI’s Board Chairman. “Seth’s diverse experience in senior roles at HUD, Ginnie Mae, MISMO, and on Capitol Hill stand out. He knows how to collaborate to get things done in Washington, and we are excited to bring his proven leadership to USMI,” continued Marzol.

“I am honored to join the private mortgage insurance industry at a time when sustainable low down payment lending – backed by private capital – is so important to borrowers and the entire housing finance system,” said Appleton. “Over 37 million low down payment borrowers have gained access to affordable and sustainable mortgage financing by utilizing private mortgage insurance. This track record of serving borrower needs while reducing risk to the housing finance system is the foundation for broad bipartisan support for the role of private MI. As USMI President, I look forward to communicating the value of private MI in unlocking the opportunity to buy a home for millions of additional families in the years to come, while at the same time providing safety and soundness for the housing finance system.”


U.S. Mortgage Insurers (USMI) is dedicated to a housing finance system backed by private capital that enables access to housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at

Blog: Celebrating Hispanic Heritage Month – Q&A with Marisa Calderon, National Community Reinvestment Coalition

As we celebrate Hispanic Heritage Month, USMI reached out to prominent leaders in the housing finance and mortgage industries to discuss their work and perspectives on the goal of increasing Hispanic homeownership in America. In a recent blog post, USMI highlighted how the Hispanic population growth is positively impacting the homeownership market in the U.S., as the Urban Institute  projects that from 2020 to 2040, most net new homeowners will be Hispanics – estimating that of the 6.9 million new homeowner households, 70 percent will be Hispanic. Further, despite having been acutely impacted by the COVID-19 pandemic, Hispanic Americans are the only demographic group to have increased their homeownership rate for six consecutive years (including 2020) according to a report by the National Association of Hispanic Real Estate Professionals (NAHREP). 

These figures speak to the importance of this demographic group to our nation and the impact they will have on mortgage markets and the face of homeownership over the next several decades. This presents an opportunity for policymakers to focus on challenges minorities face when it comes to homeownership, which USMI was also able to identify in its 2021 National Homeownership Market Survey, which polled 1,000 adults in the U.S., including an oversample of Hispanic respondents. Among the obstacles Hispanics face, 66 percent indicated that the lack of affordable homes is the biggest housing-related issue. Additionally, 20 percent said that one of the biggest challenges they face when buying a home is the inability to afford a 20 percent down payment, as monthly housing costs consume a large amount of Hispanics’ income. Lastly, 65 percent of Hispanics suggested they perceive socioeconomic bias in the homebuying process, with the survey finding that lower levels of income, lack of intergenerational wealth for down payments, and difficulties in the credit scoring system are the most significant barriers for increasing minority homeownership in the U.S.

For nearly 65 years, the private mortgage insurance (MI) industry has enabled more than 35 million low- to moderate-income borrowers attain affordable and sustainable homeownership in the conventional market. In the past year alone, nearly 60 percent of borrowers who purchased their home using private MI were first-time homebuyers, and more than 40 percent had incomes of $75,000 or less. It is a goal of the MI industry to work with policymakers to increase minority lending within the conventional mortgage market, and Hispanic Heritage Month is a perfect time to advance this conversation.

Marisa Calderon, Executive Director of National Community Reinvestment Coalition’s (NCRC) Community Development Fund and a housing and financial services industry veteran, recently shared with USMI her thoughts on these issues and others, relating to the mortgage finance sector in 2021 and beyond

(1) How does Hispanic Heritage Month intersect with homeownership?

This month is about recognizing and celebrating the Hispanic community’s contributions to U.S. culture and society – and that certainly includes this population’s undeniable economic impact. Latinos have been the primary driver of homeownership growth in our nation for the past decade and will continue to be for the foreseeable future. Looking ahead to 2040, Latinos will account for 70 percent of U.S. homeownership growth. If we as a country, can be attentive to the barriers that exist for Latinos to achieve these projected growth numbers, it enables a positive impact on building intergenerational wealth transfer for Hispanic families, and is helpful from an overall perspective for the U.S. economy.

(2) In USMI’s recent 2021 National Homeownership Market Survey, nearly 7 out of 10 Hispanic respondents considered owning a home as “very important,” as it provides stability and safety. However, survey data show most Hispanics have difficulties understanding the down payment requirements and more than half see the mortgage system in need of reform. What are the top two or three housing finance priorities that lawmakers and the Biden Administration should focus on to help Hispanics achieve affordable and sustainable homeownership?

Because of the relative youth of the population, many Hispanics are first-time home buyers and are aging into their prime-homebuying years. In general, most first-time homebuyers do not fully understand whether and how much they need for a down payment; this is no different for Hispanics. 

The difference is that many Hispanic households have less wealth and personal assets than their non-Hispanic White counterparts. This means they do not always have 3 or 5 percent saved for a down payment.

With that in mind, as part of the infrastructure package, lawmakers could focus on prioritizing down payment support for first-time buyers, low- to moderate-income individuals, Latinos, and other underserved communities that lack personal wealth and assets.

The second priority should be access to credit. Reevaluating how the industry looks at credit-scoring and evaluating risk for prospective homebuyers could be helpful in increasing access to homeownership, and more fairly and accurately assessing a borrower’s ability-to-repay. The mechanisms and approach used today are based on the behaviors and credit patterns of a mostly White population of borrowers from decades ago – which is very different from how today’s diverse consumers earn their income, understand, and use credit. For example, as drivers of U.S. small business growth, Hispanics are more likely to have non-W2 income as a significant or sole source of household income. They also are more likely to live in a multi-generational household where the income of other individuals contributes to household expense obligations. Factors like these, mean evaluating ability-to-repay must evolve beyond the fixed and firm nuclear family borrower that is a W2 wage earner. The method of earning income and household composition is different, not necessarily riskier.

That said, the most urgent issue to address is the critical lack of housing inventory across the country. If there are no homes to purchase, the potential to increase homeownership is invariably stymied. The Administration and lawmakers should make addressing the inventory crisis a priority and the need for affordable single-family inventory as part of its infrastructure approach. I stress this in particular because often times, a conversation about affordable housing is synonymous with affordable rentals alone. The reality is, it needs to be a yes/and approach to affordable rental and affordable single-family homes for owner occupancy, especially since homeownership is the primary way families build wealth in the U.S.

(3) As the Hispanic population in the U.S. is growing fast and it is projected to be the primary driver of net new homeowners for the next two decades, what actions or policies can promote greater racial homeownership equity in the next 5 to 10 years?

The home appraisal process is a good place to start in addressing systemic issues that contribute to building home equity for underserved communities. The disparity in increasing home values and the resulting lower home equity in historic communities of color is well documented. Addressing issues of conscious and unconscious bias in the appraisal process, as well as systemic issues that preclude a greater diversity of qualified appraisers from joining the profession, is one of the most direct actions that can be taken to address the evaluation of home value that ultimately results in equity or lack thereof.

Immigration reform is another important, often overlooked, policy area that has a direct impact on homeownership attainment. While there is nothing that precludes foreign born individuals from owning property in the United States, obtaining a mortgage as a foreign-born householder is another matter altogether. Few lenders make Individual Tax Identification Number (ITIN) loans part of their suite of products, and those that do, set terms and down payment requirements for borrowers that are frequently less favorable than those in the conventional market or Finance Housing Administration (FHA) financing, despite ITIN loans performing as well or better than traditional financing vehicles. With over 11 million undocumented individuals in the country, most of whom have resided in the U.S. for well over a decade, immigration reform with a pathway to citizenship would open traditional mortgage lending as an option to millions of potential new homeowners. Lack of status is not just a barrier to homeownership for undocumented individuals, it is an impediment to wealth building and economic mobility for millions who pay taxes, contribute to the economy, and have called the U.S. home for most of their lives.  

Marisa Calderon’s Biography

Marisa Calderon is the executive director of the National Community Reinvestment Coalition’s (NCRC) Community Development Fund and a housing and financial services industry veteran.

Calderon has been ranked on the Swanepoel Power 200 as one of the most powerful leaders in the residential real estate industry and named one of HousingWire’s 2018 Women of Influence for her work in increasing real estate and mortgage professionals’ understanding and appreciation of the Hispanic home-buying market. Frequently sought out as an expert, Calderon has been interviewed by numerous publications and media outlets including NPR’s Marketplace and regularly speaks at events such as those for Mortgage Bankers Association (MBA), Consumer Federation of America (CFA), the Federal Deposit Insurance Corporation (FDIC), and the National Fair Housing Alliance (NFHA).

She previously served on the advisory board for the Banc of California and the Fannie Mae Affordable Housing Advisory Council, and previously authored the State of Hispanic Homeownership Report.

She currently serves as board secretary for the Hispanic Wealth Project, which has a stated goal of tripling the median household wealth of Hispanics by 2024. She earned her bachelor’s degree from the University of California at Berkeley and is in the process of completing her MBA.

Blog: Viviendas para los hispanos: Cómo el crecimiento de la población hispana ayuda a impulsar el mercado de la propiedad

El número de hogares hispanos ha crecido por seis años consecutivos, incluso durante la pandemia del COVID-19. Aumentar de manera sostenible el acceso a la propiedad de vivienda a través de políticas como los préstamos para un pago inicial bajo, puede ayudar a cerrar la brecha de la propiedad de vivienda.

El 15 de septiembre marca el inicio del Mes de la Herencia Hispana y es una oportunidad para reconocer las significativas contribuciones y la influencia de los hispanos-americanos a la historia, cultura y logros de los Estados Unidos. También es un momento para reflexionar acerca del mercado de propiedades de viviendas para los hispanos en América. En particular, durante los últimos años, la población hispana ha sido un componente clave para el crecimiento de la propiedad de vivienda en los EE.UU., y se proyecta a ser el grupo demográfico que liderará este segmento de la industria por las siguientes cuatro décadas.

De acuerdo con el reporte de 2020 de la Oficina de Censo de EE.UU., durante los siguientes 40 años los hispanos serán los principales contribuidores al crecimiento de la población estadounidense, representando un 68 por ciento hasta el 2060. El Urban Institute también proyecta que de 2020 a 2040, la mayoría de los nuevos propietarios de viviendas netos serán hispanos, estimando que, de 6,9 millones de nuevos hogares, 70 por ciento serán hispanos. Estas cifras hablan de la importancia de este grupo demográfico a nuestra nación y el impacto que tendrán en el mercado de hipotecas y de propiedades de viviendas durante las siguientes décadas.

El crecimiento de la población hispana también es una razón importante para concentrarse en las barreras que existen para que grupos minoritarios puedan acceder a las viviendas. Retos como barreras económicas y la oferta de viviendas asequibles mantienen el acceso a la propiedad fuera del alcance de muchos de estos potenciales propietarios.  La brecha de ingresos entre hispanos y blancos no-hispanos sigue siendo pronunciada, con hogares blancos no-hispanos recibiendo un ingreso medio de hasta 26 por ciento por encima de los hogares hispanos. En 2019, el ingreso medio de un hogar hispano fue de $56.113 (Oficina de Censo de EE.UU.). Además, de acuerdo con el reporte “El Estado de la Propiedad de Viviendas para Hispanos 2020”, de la Asociación Nacional de Profesionales Hispanos de Bienes Raíces (NAHREP por sus siglas en inglés), los hispanos tienden a tener una relación de deuda-ingresos (DTI por sus siglas en inglés) más altos y puntajes de crédito más bajos, y dada la juventud de la comunidad hispana, compradores primerizos impulsan las ganancias en la propiedad de viviendas de hispanos. En 2019, el 56 por ciento de propietarios hispanos indicaron que estaban viviendo en el primer hogar que habían tenido, según reportó la encuesta de “Viviendas Americanas de 2019” de la Oficina de Censo de EE.UU. Por lo tanto, los compradores hispanos son un grupo demográfico importante, quienes son atendidos por productos hipotecarios de pago inicial bajo, los cuales benefician a compradores primerizos y de ingresos moderados, principalmente ayudando a cerrar la brecha del pago inicial.

La encuesta del “Mercado de Propiedad de Viviendas Nacional 2021” de USMI, la cual encuestó a 1.000 adultos en los EE.UU., incluyendo una muestra de hispanos, encontró que el 67 por ciento de hispanos considera que ser propietario de un hogar es algo “muy importante”. Además, la encuesta arrojó que 53 por ciento de hispanos reportó haber experimentado problemas de vivienda durante la pandemia del COVID-19, siendo las principales preocupaciones: desalojos y retrasos en el pago de rentas o hipotecas.

Entre los obstáculos que los hispanos enfrentan, 66 por ciento indicó que la escasez de hogares asequibles es el principal problema relacionado a la vivienda. Adicionalmente, el 20 por ciento señaló que uno de los mayores problemas al comprar una casa es la imposibilidad de costear un pago inicial del 20 por ciento, dado que costos mensuales de vivienda consumen una gran parte de los ingresos hispanos; cerca del 60 por ciento indicó que gastan más del 30 por ciento de sus ingresos en vivienda. Finalmente, 65 por ciento de hispanos sugirió que existe un prejuicio socioeconómico en el proceso de compra de viviendas, con la encuesta señalando que niveles bajos de ingreso, falta de riqueza intergeneracional para pagos de iniciales y dificultades en el sistema de puntaje de créditos, están entre las barreras más significativas para incrementar los niveles de propiedad de vivienda entre grupos minoritarios en los EE.UU.

Sin embargo, aunque estas barreras fueron mencionadas, el 90 por ciento de los hispanos también señaló que se sintieron tratados de manera justa durante el proceso de hipoteca. No obstante, mitos y desinformación persisten alrededor de este grupo demográfico. Por una relación de casi 3 a 1 comparado con los encuestados blancos, los hispanos creen que el proceso de aprobación de hipotecas no es asequible e indicaron que no comprenden a plenitud los requisitos para el pago de iniciales. De hecho, el 45 por ciento cree erróneamente que se requiere un pago inicial de 20 por ciento o más cuando en realidad los seguros de hipotecas privados (PMI por sus siglas en inglés) permiten a los compradores adquirir viviendas con pagos de iniciales tan bajos como el 3 por ciento.

Estas cifras y proyecciones dejan claro que, a medida que la población hispana crece rápidamente y tiene un impacto importante sobre el mercado inmobiliario, los responsables de la formulación de políticas no deben perder de vista tanto retos del mercado a corto plazo, como la escasez significativa de viviendas asequibles para compra o renta, como también problemas sistémicos de largo plazo que incrementan innecesariamente los costos o crean barreras para minorías y compradores de menor ingreso. Aun así, a pesar de haber sido particularmente impactados por la pandemia del COVID-19, hispanos-americanos son el único grupo demográfico que ha incrementado su tasa de propiedad de vivienda por seis años consecutivos (incluyendo el 2020) de acuerdo con NAHREP. Retirar las barreras que enfrentan las minorías para acceder a viviendas permitirá que incluso más hogares hispanos gocen de los beneficios de ser propietarios durante las siguientes décadas.

Los seguros de hipotecas privados (PMI) aumentan las posibilidades de compra de viviendas para minorías y hogares de bajos ingresos, al permitirles obtener préstamos de manera asequible y sostenible, ayudándoles así a alcanzar una estabilidad inmobiliaria y generar riqueza, logrando el Sueño Americano. En 2020, casi el 60 por ciento de los prestatarios atendidos por seguros de hipotecas privados eran compradores primerizos y más del 40 por ciento eran prestatarios con ingresos por debajo de los $75.000 anuales. De hecho, la encuesta de USMI encontró que los consumidores ven a este sector privado como una pieza importante dentro del rompecabezas del mercado de propiedad de viviendas, nivelando el campo de juego al ayudar a compradores de bajos y moderados ingresos y primerizos a acceder la financiación de viviendas.

En la medida que celebramos el Mes de la Herencia Hispana, manifestamos nuestro compromiso con el apoyo de políticas sólidas y prudentes que ayuden a expandir la propiedad de viviendas.

Blog: 2021 National Homeownership Market Survey

ClearPath Strategies fielded USMI’s 2021 National Homeownership Market Survey of 1,000 adults in the U.S. It was commissioned online April 13-21. Quotas were set to ensure a cross sample of age, gender, race, region, and education as well as homeowners, first-time homebuyers, and prospective homebuyers. The purpose was to understand the perceptions around homeownership, the mortgage process, and the challenges people face when trying to purchase a home. 

The survey finds that 7 in 10 say lack of affordable housing is the biggest homebuying challenge in the United States, while many do not understand down payment requirements. Housing insecurity (66 percent) and low supply (57 percent) closely followed. Socioeconomic disparities – such as lower income, lack of intergenerational wealth, limited savings, and the percentage of monthly income dedicated to housing costs – were reported to make these challenges more acute.  

“This survey underscores the need to address the nation’s undersupply of housing, and specifically affordable housing, because too many people are being left out of the market or face significant barriers to get into the housing market,” said Lindsey Johnson, President of USMI. “Our survey shows that low- to moderate-income households and underserved communities struggle to become homeowners due to several major factors including low housing supply, lack of affordable housing, and personal economic factors such as imperfect credit score or the inability to afford a 20 percent down payment.” 

USMI members continue to help millions of borrowers bridge the down payment gap. USMI supports sensible regulatory and legislative reforms to further address barriers to homeownership and promote an equitable and sustainable housing finance system backed by private capital. In collaboration with more than 100 organizations and individuals involved in the Black Homeownership Collaborative, USMI also supports policies that promote equity and work to increase homeownership rates among Black Americans.  

Full survey results can be found here. Press release on the survey can be found here.  

Op-Ed: We must increase access to affordable mortgages for minority borrowers

By: Lindsey Johnson

Homeownership has been on the rise over the past few years even during the COVID-19 pandemic, but a deeper look at who is able to become a homeowner reveals significant racial and economic gaps. With a growing recognition in Washington of this disparity and a renewed focus on increasing financial security for Black and Hispanic families, policymakers and industry have the opportunity to correct inequities and sustainably increase minority homeownership.

U.S. Census data for the third quarter of 2020 show that homeownership among White households stands at nearly 76 percent, compared to nearly 51 percent for Hispanic households, and 46 percent for Black households. Meanwhile, of the minority borrowers who qualified for home financing, many encountered added costs that make homeownership disproportionately more expensive or altogether out of reach.

COVID-19 has further compounded the racial and economic gap as millions of low- to moderate-income families have lost their jobs and face financial insecurity. The Urban Institute finds that Black and Hispanic homeowners are significantly more likely to face financial hardships and are more at risk of not being able to pay their rent or mortgage payment due to the impacts of the pandemic.

So, while we must focus on the pandemic and its impact on borrowers, and particularly minority borrowers, we must also not lose sight of addressing the longer-term systemic issues that unnecessarily increase costs or create barriers for minority borrowers. Importantly, expanding homeownership opportunities for minority borrowers does not have to be at the expense of the reforms made over the last decade that have drastically improved lending to protect consumers and avoid another housing market collapse. The housing finance system can remain stable and manage mortgage credit risk prudently, while also using data-driven, targeted approaches to reduce barriers to affordable mortgages for Black and Hispanic households.

Mortgage affordability could be further stressed once new regulatory mandates are implemented. This includes new capital requirements for Fannie Mae and Freddie Mac (the GSEs) recently finalized by the Federal Housing Finance Agency (FHFA). While it is essential that the GSEs hold appropriate capital, the rule must be balanced and policymakers should consider changes to elements of the final rule that threaten to raise the cost of mortgages for all borrowers and push homeownership farther out of reach for many families of color.

Additionally, policies that adversely drive up costs for minority borrowers should be re-examined and reduced or eliminated. Loan-level price adjustments (LLPAs) that were introduced by the GSEs in 2008 are especially burdensome for minority and first-time homebuyers. These fees are disproportionately paid by borrowers with lower down payments and credit scores, whose mortgages are already protected by private mortgage insurance. Essentially, borrowers are being double charged for the same risk protection. Industry and consumer advocates — including the National Fair Housing Alliance and the Center for Responsible Lending — have long urged the GSEs to reduce or eliminate these redundant fees.

Further, it is critical that policymakers recognize the role of low down payment mortgage options in facilitating homeownership. In fact, more than 80 percent of first-time homebuyers used low down payment mortgage options in the past several years — with options as low as 3 percent down. While these options have prudently enabled millions of people of all backgrounds to become homeowners, even more targeted down payment assistance programs should be considered for borrowers who may not have intergenerational wealth or equity from a previous home to contribute to a down payment. Legislation like Rep. Al Lawson’s (D-Fla.) First-Time Homeowners Assistance Act should be given close consideration when re-introduced in 2021. Meanwhile, President Biden has already expressed interest in a first-time homebuyer tax credit — a very welcome early signal from the new administration.

There are other issues that warrant attention, such as the low supply of affordable housing and lack of access to financial education. This list goes on, and we recommend that the Biden administration assemble a task force that includes broad representation from industry, consumer advocate community, and government to formulate an action plan, build consensus, and get to work.

As an industry that exists to help low- and middle-income households qualify for low down payment mortgages, private mortgage insurers understand the need to balance responsible lending with access to affordable mortgage finance credit. There are tangible and measurable steps to sustainably expand homeownership for minority families and fortunately there is an eagerness across the housing policy sector to achieve these outcomes.

This piece was first published in The Hill on January 30, 2021.

Letter: To Honorable Marcia Fudge, HUD Secretary Designate

The Honorable Marcia Fudge
Secretary Designate
U.S. Department of Housing and Urban Development
451 7th Street SW
Washington, DC 20410

Dear Honorable Fudge,

U.S. Mortgage Insurers (“USMI”) and its member companies congratulate you on your nomination to serve as the Secretary of the U.S. Department of Housing and Urban Development (HUD). Your many years of public service, including as mayor of Warrensville Heights, Ohio and the U.S. Representative for Ohio’s 11th Congressional District, demonstrates your commitment to community, and will serve you well as Secretary of HUD, as you have no doubt seen in your own district the homeownership challenges facing hardworking American families.

For more than 60 years, the private mortgage insurance (MI) industry has enabled more than 33 million low- and-moderate income Americans to attain affordable and sustainable homeownership in the conventional market. Working with the government-sponsored enterprises (GSEs) —Fannie Mae and Freddie Mac— and lenders of all sizes and business models, private MIs help borrowers qualify for mortgage finance credit with down payments as low as three percent. In the past year alone, more than 1.5 million people were able to purchase or refinance their mortgage due to private MI. Nearly 60 percent of borrowers who purchased their home using private MI were first-time homebuyers and more than 40 percent had incomes of $75,000 or less. Importantly, because USMI members provide private capital in front of the GSEs and taxpayers, the industry also provides significant loss protection to the mortgage finance system, having covered well over $50 billion in claims through the 2008 financial crisis—losses that would have otherwise been borne by taxpayers.

Through the last year despite the unprecedented challenges presented by COVID-19 pandemic, mortgage credit has been largely affordable due to historically low interest rates and 2020 had the largest mortgage origination volume since 2006—both for the conventional and Federal Housing Administration (FHA) markets. Despite this record mortgage volume and historically low interest rates, there remain significant housing affordability challenges for many borrowers across the country, including that nationwide home price appreciation (HPA) has skyrocketed to 7.3 percent year-over-year, the highest increase since 2014. Moreover, for the past seven years, the segment of the market that has experienced the largest and fastest HPA has been the lower end of the market, which over the last year saw an increase of nearly 11 percent. A driving force behind the high HPA is the fact that consumer demand continues to outpace new home construction, thereby exacerbating housing affordability by driving up home prices and putting homeownership further out of reach for many prospective homebuyers, most notably for minority and first time borrowers.

Policy recommendations such as lowering FHA premiums too quickly and aggressively may significantly impact FHA’s ability to address the challenges that will arise as COVID forbearances end, and coupled with the high delinquencies for FHA loans, could ultimately lead to higher claims, potentially undermining FHA’s ability to help future borrowers. Further, reducing premiums would only add fuel to the fire in terms of artificially lowering what is already relatively affordable mortgage finance credit. Such actions would inject more “demand” into the market without addressing the “supply” side—which will only drive-up home prices further, hurting affordability at the lower end of the market most. Additionally, other policy recommendations such as ending FHA’s “life-of-loan” policy, which would require FHA to continue to insure loans (because FHA insurance does not in fact cancel) without coverage being paid for, could similarly weaken FHA and its ability to meet the housing needs of future borrowers, while also exposing taxpayers to undue risk. FHA’s insurance stays on the loan for the “life of the loan,” therefore those who suggest ending the “life of loan” premiums are essentially advocating for providing free government-backed insurance.

There are other areas that may represent barriers to homeownership that policymakers should also choose to explore, including the targeted use of down payment assistance (DPA) programs for the borrowers who are unable to attain even a 3 percent or 3.5 percent down payment, who truly need the support. It is important that DPA programs are structured and operated in a sustainable manner so as to not create excessive leverage and risk within the mortgage finance system, or pose undue risk to taxpayers and the economy, which will ultimately hurt vulnerable homeowners most. As federal policy makers look to increase homeownership, it is essential that it is done in a manner that promotes sustainable homeownership for borrowers, as it does more harm to a family to get into a home that they can then not afford. There are meaningful ways to enhance borrower sustainability, such as by using part of a DPA to establish a reserve account for certain borrowers. Reserve accounts have been proven to be predictive of a borrower’s ability-to-repay their loan, and by focusing on reserve accounts, HUD not only prioritizes getting people into homes, but also helping them be successful homeowners. There are other important considerations to promote sustainable homeownership, such as housing counseling, for borrowers where HUD or FHA aim to expand access to mortgage finance credit.

Finally, USMI’s members intimately understand the importance of ensuring access to affordable, prudent low down payment mortgages in the marketplace. Understanding that more than 80 percent of first-time homebuyers over the last several years have depended on access to low down payment lending, it is more important than ever that the government-backed FHA program and the conventional market backed by private MI operate in a consistent and coordinated manner. Each plays an important, and distinct, role in the housing finance system and they should not be competing for market share—a situation which ultimately does a disservice to the borrowers we serve and to taxpayers.

FHA has long been a vital resource for many borrowers who may not have the ability to attain mortgage finance credit through the conventional market. Our industry looks forward to working with you and welcomes the opportunity to further engage with HUD and FHA to identify and address risks in the system and barriers to homeownership for borrowers, as well as find ways to further enhance a coordinated and consistent housing market that provides for the greatest access to sustainable mortgage finance credit.

We wish you the best in your transition to HUD Secretary and look forward to working with you once you are confirmed.


Lindsey D. Johnson

For a full PDF of this letter, click here.


Statement: Federal Housing Administration FY 2020 Annual Report to Congress

WASHINGTON— Lindsey Johnson, President of the U.S. Mortgage Insurers (USMI), released the following statement on the Federal Housing Administration’s (FHA) release of its Fiscal Year 2020 Annual Report to Congress on the financial status of the Mutual Mortgage Insurance Fund (MMIF):

“Today’s report shows that the MMIF’s combined capital ratio stands at 6.10 percent, up from 4.84 percent last year, well above the statutory requirement of 2 percent. We applaud the FHA’s steadfast commitment to improving the fiscal health of the fund especially during these challenging times. The FHA continues to play an important role in the housing finance system, and we commend its ongoing collaboration with industry efforts to stabilize the market amidst the COVID-19 pandemic.

“The FHA is a vital part of the housing finance system and it must continue to focus on enhancing its financial strength to best serve the borrowers who need it the most. This is especially important for the FHA in a post-pandemic environment to ensure the agency does not unnecessarily expose taxpayers to undue mortgage credit risk. While some have called for the FHA to reduce its mortgage insurance premiums, the report makes it clear that this is unnecessary and imprudent at this time as consumers continue to have access to low cost mortgage credit. A reduction would diminish the MMIF’s ability to withstand potential stress caused by the economic fallout from the pandemic, evidenced in the nearly 11.6 percent of FHA-insured mortgages that are classified as seriously delinquent. Further, calls to end the premiums for the life of FHA loans are just a veiled way of reducing premiums. Such a move would jeopardize FHA’s ability to serve the borrowers who rely on its insurance today, and borrowers in the future who may need FHA to access homeownership. Now, more than ever, is the time for the FHA to sustain its financial health and focus on its core mission — to serve borrowers the conventional market is unable to adequately serve.

“USMI and our member companies look forward to continuing to work with FHA and Congress to foster a robust housing finance system that meets the needs of low down payment borrowers while protecting taxpayers. To this end, it is essential that federal policymakers advance a coordinated housing policy to best balance consumers’ access to affordable mortgage finance and prudent management of mortgage credit risk.”


U.S. Mortgage Insurers (USMI) is dedicated to a housing finance system backed by private capital that enables access to housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at