Obama budget projects $943-million bailout for key housing agency

The Obama administration’s proposed budget projects the Federal Housing Administration will need a $943-million bailout this year to stabilize its shaky long-term finances.

The agency, whose mortgage insurance business increased dramatically during the Great Recession, is supposed to fund itself from premiums it charges homeowners. It has never received taxpayer funds in its 79-year history.

But the agency reported in November that reserves to cover losses on some of the more than $1 trillion in mortgages it insures had dropped into negative territory for the year that ended Sept. 30.

The FHA has permanent authority to draw the money from the Treasury and does not need congressional approval for the bailout.

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