If it ain't broke, don't fix it.

That's the message being sent by FHA Commissioner William Apgar to Rep. Rick Lazio, R-N.Y., who has proposed merging the Federal Housing Administration with the Government National Mortgage Association, taking them out of the Department of Housing and Urban Development and turning them into a separate corporation.

And Apgar's argument is bolstered by a new independent study that found the FHA's mutual mortgage insurance fund is in its best shape since it was created in 1934.

The study by the Deloitte & Touche accounting firm says the fund has an economic value of $16.6 billion, an increase of $5.3 billion over 1998. The economic value is defined as the sum of existing capital plus the value of current insurance in force.

The report also says the FHA's capital adequacy ratio is 3.66 percent, far in excess of the Congressionally mandated goal of 2 percent. Capital adequacy is the economic value of the fund divided by the total insurance in force.

The FHA has enabled some 30 million families to qualify for mortgages since its inception by insuring the loans against default, thereby protecting lenders from losses. Ginnie Mae guarantees securities issued by private lenders that are backed by pools of FHA-insured mortgages.

The Deloitee & Touche study is the equivalent of a straight A report card, and "hardly an evaluation that shows FHA should drop out of HUD," says Apgar, who finds it "mind-boggling" that legislators continue to float proposals to spin-off even one of the agencies.

"This new study shows FHA has succeeded by bringing in more revenue for the federal government and by helping more Americans build better lives for their families and brighter futures for their communities," the FHA commissioner said. "Very few government programs can say they accomplish so much with costing taxpayers a penny."

Last year alone, the FHA returned about $1.5 billion to the U.S. Treasury. But that wasn't always the case. In fact, a decade ago, the insurance fund had an economic value of minus-$2.7 billion and a costly federal bailout seemed inevitable.

Published: March 13, 2000

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.