Newsletter: December 2025
December 11, 2025
As we head into the holidays, USMI is rounding up recent housing finance news to read by the fireplace on those snowy nights. USMI published an infographic showing that the cost of private MI has declined 25% in recent years and released a policy brief on why the Federal Housing Administration’s 35-year-old Capital Ratio should be modernized. Additionally, USMI President Seth Appleton penned op-eds in both HousingWire and The Western Journal. USMI also submitted feedback to U.S. Federal Housing (FHFA) on its Notice of Proposed Rulemaking repealing its rule on Fair Lending, Fair Housing, and Equitable Housing Finance Plans, proposed 2026 – 2028 Enterprise Housing Goals, and proposed Strategic Plan for Fiscal Years 2026 – 2030; and to the Securities and Exchange Commission (SEC) on matters relating to Regulation AB (Reg AB II). Furthermore, USMI supported the confirmation of Jonathan McKernan as Under Secretary for Domestic Finance at the U.S. Department of the Treasury. Read about these developments along with much more below.
On November 25, USMI released an infographic highlighting the striking difference between the cost trends of private MI versus homeowners insurance costs, property/real estate taxes, household utility costs, and 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 which has declined in cost in recent years, compared to other costs that have increased.
On November 11, USMI President Seth Appleton authored an op-ed in The Western Journal on the benefits that American families will soon see thanks to the permanent reinstatement of the MI premium tax deduction as part of President Trump’s One Big Beautiful Bill Act. Appleton wrote, “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.”
On October 28, USMI President Seth Appleton authored an op-ed in HousingWire on how private MI is a powerful tool that helps first-time buyers and working-class families become homeowners years sooner by reducing the cash needed at the closing table by tens of thousands of dollars. In the piece, Appleton highlighted that private MI paid monthly by the borrower is not a closing cost, is temporary, and that the cost of private MI has declined in recent years, unlike most other costs associated with homeownership.
On November 13, USMI released a policy brief and accompanying blog featuring analysis from the third-party actuarial firm Milliman estimating 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). 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 cover unexpected losses. 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. Milliman estimated that, if held to the same capital standard that private mortgage insurers must meet to insure loans acquired by the GSEs in the conventional market (PMIERs), FHA would run a $31.7 billion shortfall. Similarly, FHA would need to hold $50 billion more to meet the GSE capital framework’s (ERCF) minimum requirement if applied to FHA’s book of business. The policy brief recommended that, after 35 years, Congress should consider replacing the 2% Capital Ratio requirement with an updated stress-based, loan-level risk-weighted standard to 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.
On September 25, 2025, USMI submitted a comment letter on FHFA’s Notice of Proposed Rulemaking (NPR) repealing its “Fair Lending, Fair Housing, and Equitable Housing Finance Plans” regulation. USMI’s members are key partners of the GSEs and look forward to continued collaboration in helping low down payment borrowers affordably and sustainably achieve homeownership sooner in the conventional market. Under the oversight of FHFA, and consistent with their congressional charters and missions, the GSEs operate Duty to Serve programs and are required to meet affordable housing goals to ensure broad access to credit for underserved and working-class communities. In the letter, USMI reiterated that it strongly supports FHFA’s work to reduce unnecessary regulatory burdens and supports actions to ensure resources are focused on programs and initiatives such as these that are expressly sanctioned by the GSEs’ congressional charters and that already prudently serve borrowers nationwide.
On October 8, USMI issued a statement congratulating Jonathan McKernan on his Senate confirmation to oversee the Treasury Department’s Office of Domestic Finance. USMI President Seth Appleton stated, “USMI and its members look forward to working with Under Secretary McKernan, the Trump Administration, and congressional leaders to help more Americans affordably and prudently access homeownership, while protecting the GSEs, taxpayers, lenders, and investors from mortgage credit risk.”
On November 3, USMI submitted a comment letter for FHFA’s proposed rule on “2026 – 2028 Enterprise Housing Goals.” In the letter, USMI expressed support for “FHFA’s work to ensure that the GSEs’ statutorily required housing goals are established and maintained, but not calibrated in such a way that they inhibit the conventional conforming market’s ability to broadly serve middle- and working-class Americans, including homebuyers without large cash down payments, in all geographies during all economic cycles.”
On November 5, USMI submitted a comment letter on the proposed FHFA “Strategic Plan for Fiscal Years 2026 – 2030.” USMI fully supports the overarching goal articulated in FHFA’s Strategic Plan to “ensure the operations and activities of each regulated entity foster liquid, efficient, competitive, and resilient national housing finance markets in a safe and sound manner.” In the letter, USMI provided recommendations on the GSEs’ role in the housing finance system, counterparty standards, addressing housing supply challenges, combatting mortgage fraud, and the Federal Home Loan Bank System.
On December 1, USMI submitted a comment letter on the SEC’s “Concept Release on Residential Mortgage-Backed Securities (RMBS) Disclosures and Enhancements to Asset-Backed Securities Registration” (Concept Release). USMI appreciates the opportunity to engage with the SEC on housing-related policies that promote access to affordable and sustainable homeownership, especially for borrowers without large cash down payments. Separately, USMI also joined the American Bankers Association (ABA), Securities Industry and Financial Markets Association (SIFMA), Mortgage Bankers Association (MBA), SIFMA-Asset Management Group, Independent Community Bankers of America (UCBA), Structured Finance Association (SFA), and Housing Policy Council (HPC) to send a joint letter to SEC Chairman Paul Atkins commending the Commission for prioritizing “Asset-Backed Securities Registration and Disclosure Enhancements” on the Spring 2025 Unified Agenda of Regulatory and Deregulatory Actions. The organizations believe that revising Reg AB II to help reinvigorate the public RMBS market alongside the private one would yield significant benefits for U.S. consumers and the housing market.
On December 4, the Urban Institute’s Housing Finance Policy Center released its 2025 “Mortgage Insurance Data at a Glance” report, which quantifies the role of private MI in the market. The latest data found that conventional mortgages with private MI have been the most common execution for low down payment purchasers since 2018; that the total loss severity for GSE loans without private MI from 1994 to 2024 was 16.7% higher than that of loans with private MI; and that the capitalization of the mortgage insurance industry has increased since 2008, while the average private MI in force premium yield has declined from 52.5 to 39.4 basis points (a 25% reduction) between 2017 and 2024. Click here to read the full report.
