FHA Loan Insurance Fund Stronger

The Federal Housing Administration fund that insures single-family mortgages grew stronger as insurance claims fell in the fiscal year ended Sept. 30, an audit by KPMG Peat Marwick found.

The capital ratio of the mutual mortgage insurance fund, which covered FHA loans totaling $337 billion, climbed to 2.54%, from 2.05% in fiscal 1995.

It was the second straight year that the ratio, a gauge of the fund's ability to absorb unexpected losses, exceeded the 2% target set by Congress in 1990. That target was to be reached by 2000.

The annual audit, released Wednesday, also found that claims on single- family loans fell 7% from the year before, to 60,884 in the last fiscal year.

The agency continued to reduce its inventory of defaulted single-family loans in fiscal 1996. The portfolio declined by 48% over three years to 52,072 loans on Sept. 30, from a high of 100,079 at the end of fiscal 1993, the audit found.

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