WASHINGTON - A key congressman signaled last week that a restructured FHA program would insure only a portion of a mortgage amount rather than the current 100%.

House Banking Committee member Rick Lazio, R-N.Y., told an audience at American University that "it just doesn't make sense to have private entities reaping profits because of government-insured loans if the government ... is taking 100% of the risk."

"We have to look closely at FHA's 100% insurance programs and ask ourselves if that is how we should continue. Even Veterans Administration programs don't provide 100% insurance," Mr. Lazio said. "There are more responsible ways to support homeownership."

As chairman of the housing subcommittee, the 37-year-old lawmaker is in charge of the Republican remake of the Department of Housing and Urban Development, which operates the FHA program.

Mr. Lazio did not give many details of a new FHA program, but he appeared to suggest that less government would be better, as in other areas of housing policy.

Mr. Lazio pointed out that when the Federal Housing Administration was formed in 1934, there was no private mortgage insurance and no market for long-term fixed-rate mortgages.

"Today, the private sector is the principal force of capital and innovation and is the primary source of funding for homeownership," Mr. Lazio said.

He said he would introduce legislation this fall to create an FHA-type corporation, which would include an entity like the Resolution Trust Corp. to "resolve the crisis in the FHA's multi- and single-family portfolios."

Mortgage bankers, who make most FHA-insured loans, are sure to oppose any cutback in the 100% insurance feature that would leave them holding some risk.

On the other side, private mortgage insurance companies, such as GE, are likely to welcome the cutback in insurance because it would make government-insured loans less attractive than they now are.

The FHA share of mortgages was 11% in 1994.

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