Oh, Oh: From HUD Hearings This Morning-CBO Says FHA Contributes $3.9 Billion Less Than What HUD Projected in FY 2011 Budget.

Have started to watch today's Senate HUD Appropriations Subcommittee hearing, first important point picked up is that last Friday CBO scored FHA net receipts at about $4 Billion LESS than what HUD had included in the FY 2011 budget.

In remarks for separate House hearing on FHA reforms this morning, FHA Commissioner Stevens said this:

Last Friday, the Congressional Budget Office released its re-estimate of the President's 2011 Budget. Although the CBO re-estimate includes a significantly more conservative assessment of how new loans made through FHA's MMI Fund will perform in coming years, both CBO and the Administration forecast that such credit activity will result in net receipts to the Government. We differ, however, on the amount. While the President's Budget forecast $5.8 billion in net receipts resulting primarily from insurance premiums and other fees assessed on FHA loans, CBO re-estimated those net savings at $1.9 billion. Accordingly, CBO's scoring suggests our policies will cost $3.9 billion more than we estimated in our submission to you.

This $3.9 Billion reduction in HUD revenues can't be good news for the rest of HUD's budget and is sure to be a substantial hurdle for HUD to overcome in FY 2011 budget discussions over the next few months.

Originally created and posted on the Oregon Housing Blog.