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WASHINGTON (AP) - A federal agency that insures mortgages for millions of low- and middle-income borrowers says it requires $1.7 billion in taxpayer aid immediately to cover its losses.
The head of the Federal Housing Administration sent a letter Friday informing Congress that it must draw the funds from the Treasury Monday, the first time the agency has taken taxpayer support in its history. The agency, part of the Department of Housing and Urban Development, has been struggling with billions of dollars in losses on mortgages it insures.
The FHA is required by law to maintain reserves equal to 2 percent of the mortgages it insures. It currently has about $30 billion in reserves, FHA Commissioner Carol Galante said in the letter. She said that is enough to cover future expected losses.
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