FHA's Insurance Fund Is Sound. But FHA Delinquencies Are Rising.

The Mortgage Bankers Association's president pushed back this week against a Wall Street Journal editorial board op-ed that argued a $2.05 billion capital infusion at United Wholesale Mortgage signals deep trouble in the Federal Housing Administration's mortgage insurance fund. The rebuttal, authored by MBA president and CEO Bob Broeksmit and published by the Journal on August 29, calls the premise a fundamental misread — but the underlying data the argument surfaced is worth every home seller's attention.

What the Wall Street Journal Claimed, and Why It Sparked a Fight

On August 13, the Journal's editorial board published a piece arguing that UWM — the nation's largest mortgage lender — was taking on outsized risk using FHA-backed loans, and that the Oaktree Capital Management capital deal revealed cracks in the broader FHA lending ecosystem. The editorial cited FHA data showing that 21% of UWM's FHA loans originated over the past two years became seriously delinquent within 12 months. It also noted that 70% of FHA borrowers carried debt-to-income ratios above 43% as of late 2022, compared to just 28% a decade earlier. And it flagged that 15% of FHA borrowers who closed between June 2021 and March 2024 fell seriously delinquent within a year.

Broeksmit's response was direct: UWM's capital raise was the result of a single company's hedging miscalculation on interest rates, not evidence of systemic FHA underwriting failures. He also pointed to the FHA's Mutual Mortgage Insurance Fund, which carries a capital ratio of 11.47% as of fiscal year 2025 — nearly six times the 2% minimum Congress mandates, and above that floor for eleven consecutive years.

Independent mortgage banks, including UWM, now originate 84% of all single-family mortgages and handle 90% of FHA volume, up from 57% in 2010, according to a report from the Community Home Lenders of America. That concentration means any systemic stress, real or perceived, runs through a relatively small set of lenders.

The Delinquency Numbers That Both Sides Are Dancing Around

Whatever the cause, the payment stress in the FHA book is real. MBA data for the second quarter of 2026 shows 11.79% of FHA borrowers are behind on their payments — up 122 basis points from Q2 2025. The seriously delinquent rate, covering loans at least 90 days past due or already in foreclosure, rose 227 basis points to 2.06%. By comparison, the delinquency rate for conventional mortgages sat at 2.72% in Q2 2026.

Foreclosure filings are also climbing. ATTOM reported a 10% year-over-year increase in July 2026 across all loan types, and a 21% jump in filings for the first half of 2026 compared to the same period last year. Market analysts, including mortgage consultant Rick Sharga, point to the end of pandemic-era forbearance protections and rising household costs — property taxes, insurance, everyday expenses — rather than reckless underwriting, as the primary pressure. Sharga noted that FHA borrowers typically start with less equity, carry higher debt-to-income ratios, and hold lower cash reserves, which limits their ability to recover once they fall behind.

What This Means If You're Selling to an FHA Buyer Right Now

For sellers, this dispute is background noise — but the data underneath it is operational intelligence. FHA loans remain a dominant financing tool for first-time buyers. If you're listing a home priced to attract that buyer pool, you need a clear-eyed view of what's happening in that segment.

First, FHA financing is not going away, and the insurance fund's capital cushion means there's no imminent policy shock that would cut FHA access overnight. Sellers should not treat this news as a reason to categorically refuse FHA offers.

Second, rising delinquencies in the FHA book can slow deals at the margins. Lenders facing higher early-payment default rates on their FHA portfolios sometimes tighten their own overlays — credit score floors, DTI limits, or down payment requirements — above the FHA's minimums. That means a buyer who appears FHA-qualified on paper may find their lender's internal standards are stricter. Sellers accepting FHA offers in this environment should ask their agent to verify that the buyer's pre-approval comes from a lender actively writing FHA loans without unusual overlays.

Third, appraisal and condition requirements remain a practical friction point with FHA financing. FHA appraisers flag health and safety issues that conventional appraisals often pass over. If your home has deferred maintenance — peeling paint, exposed wiring, non-functioning systems — budget for those repairs before listing, or factor them into how you respond to FHA offers versus conventional ones.

Fourth, if your market is seeing foreclosure volume tick up even modestly, it introduces more distressed comparables into your appraisal range. That doesn't mean your home appraises below asking — but it means your agent should be prepared to defend your price relative to any distressed sales that have closed nearby.

The FHA fund itself is not in danger. But sellers working with FHA buyers are operating in a lending environment where borrower financial stress is measurably higher than it was a year ago. Qualifying for a loan and successfully closing on one are two different things right now. Pricing your home to a realistic buyer pool and vetting offers carefully is the practical takeaway from an argument that might otherwise look like an inside-baseball industry spat.

If you want a precise picture of what buyers in your price range are actually getting approved for — and what offer structures are most likely to close cleanly — an instant offer comparison can give you a baseline before you list.