With a growing number of homebuyers depending on government-insured loans, the Obama administration is taking steps to shore up the Federal Housing Administration program.  Rising demand and a slower-than-expected rebound in home prices are pushing one of FHA's reserve accounts below the 2% ratio mandated by Congress, said Commissioner David Stevens.  
     The capital reserves are a cushion against expected losses in the program, which has suffered soaring defaults amid the housing collapse.  The drop in reserves will not require a taxpayer-funded infusion into the housing agency, nor an increase in insurance premiums that FHA borrowers pay, Stevens said. The capital reserves, which are determined by an independent auditor and reported to Congress in November, will rise above the minimum threshold within a few years as the housing market recovers.
 
    The agency's overall reserves stand at more than $30 billion, a record level thanks to the large influx of premium-paying borrowers, Stevens said. It covers more than 4.4% of its insurance commitments.  Still, the agency is taking a number of steps to reduce the riskiness of the program, which allows borrowers to purchase a home with as little as 3.5% down. It plans to hire its first chief risk officer in its 75-year history and to increase net-worth requirements for approved lenders to $1 million, up from $250,000. Lenders will also be responsible for any losses resulting from fraud on the part of mortgage brokers.
 
    The changes may eliminate some smaller FHA lenders and will likely weed out some of the riskier borrowers, Stevens said.
 
Source: CNNMoney.com