FHA "Reform" and Bad Reporting
Taxpayer dollars don't directly support the FHA loan insurance program - the premiums paid by homeowners with FHA loans do. But taxpayers could end up footing the bill if too many FHA loans go south.
Try this on for size, straight from the CBO.
FHA home loan guarantees are unusual among federal credit programs in that they are generally estimated to produce net income for the government, rather than net costs. That is, the value of collections from guarantee fees is expected to exceed the value of outlays from defaults. The projected gain to the government from those guarantees during the 1992-2002 period was about 2.5 percent of the dollar volume of loans guaranteed. Actual program performance, however, has fallen short of expectations. Credit subsidy reestimates for guaranteed mortgages disbursed during that period reduced the expected gain to the government by about 0.5 percent of the total dollar volume. On nearly $900 billion in guaranteed loans, that downward revision amounts to more than $4 billion in anticipated net collections that are no longer expected.
Yeah, and that's from 2003. And it's before they added these crummy borrowers jacked up on big loans with almost zero equity (the new rules).