Lenders and trade groups were still in the dark on Friday about details of the White House's plan to transform the Federal Housing Administration.

And they'll stay there for a few more days.

The Department of Housing and Urban Development is still working on the changes, according to an agency spokeswoman. HUD Secretary Henry Cisneros will brief reporters today.

"We haven't heard anything specific," said Ellen Schweppe, director of communications at the Mortgage Insurance Companies of America. "We don't have any greater sense of what any potential changes might mean."

The Mortgage Bankers Association, which is a strong advocate of the federal insurance program, said it remains confident that the FHA will continue to insure individual mortgages as it now does. Risk-sharing programs, advocated by President Clinton's own budget staff as well as by Republicans, will be done only on a limited basis, an MBA official said.

It is believed that the FHA will convert to a government-owned corporation.

All sides agree that the real battle for the shape of the FHA will now be fought in Congress.

The Federal Housing Administration has long been identified with first-time homebuyers and minority borrowers.

Two-thirds of FHA-insured loans are made to first-time homebuyers, and a fifth to minorities, according to the MBA.

Without the program, the trade group said, it would be harder to reach those groups, even as the government pushes lenders to make more home loans to minorities and tries to boost the nation's homeownership rate.

If FHA isn't around, "some people just won't ever make it" as homeowners, said Cheryl Malloy, senior staff vice president of the MBA. Some people will wait longer to scrape together a downpayment, she said.

The program is especially important in tight markets, such as the current one.

"You are trying to go out and look for business that's usually tougher (to do)," Ms. Malloy explained. "You need FHA."

Lenders also rely more heavily on FHA when most loans made are for home purchases, not refinances, as is the case this year.

The government agency's market share went up this year to 13% from about 10% last year.

Ninety percent of all FHA loans are done by mortgage bankers, and many large lenders do a significant share of their business with the FHA.

FHA is the insurer of choice for first-time, low-income, and minority borrowers, because it has more flexible credit standards than the secondary market agencies, Fannie Mae and Freddie Mac, which could supplant it, if FHA gets out of the business of insuring individual loans.

* It accepts a large volume of loans with low down payments. Two-thirds of FHA business consists of loans with loan-to-value ratios greater than 90%, Ms. Malloy said. By contrast, Fannie and Freddie do only 10 to 15% of their business with such borrowers, she said.

* FHA insures loans to borrowers with sketchy credit histories.

* It allows homebuyers to use more of their income for housing and other debt.

Also, FHA is important, the MBA said, because it stays in housing markets even when conditions turn sour.

An often-cited example: the oil patch states in the 1980s.

If you couldn't put 20% down in Texas and Oklahoma in the 1980s, the only loan you could get was an FHA loan, said Ms. Malloy.

Private mortgage insurers avoided the troubled market, and Fannie Mae and Freddie Mac require that all loans with less than 20% down carry private mortgage insurance.

If FHA were to become a program solely for the highest-risk borrowers, as its critics want, and shares its risk with investors and private insurers, FHA borrowers will have to pay higher interest rates than they now do, according to the MBA.

"If you do pool insurance, you wouldn't have the full faith" of the government to back the loans, said Ms. Malloy.

The MBA estimates that interest rates on FHA-backed loans would be 0.25% higher than they now are.

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