Panel Advises Against Selling Federal Housing Administration

A task force advised the White House on Friday against selling the Federal Housing Administration, which provides mortgage assistance to millions of Americans.

“The task force believes that an outright sale of the FHA would be unlikely to attract buyers at a price the government would find adequate or to satisfy other desirable sale considerations,” the study group, sponsored by the Housing and Urban Development Department, said in a report.

The panel was established a year ago after President Reagan, in his fiscal 1987 budget, called for the “privatization” of many government functions in an effort to reduce the budget deficit or restrict the role of government.

But the task force, headed by Glenn Wilson, president of the Government National Mortgage Assn., said it could not demonstrate that there would be either a willing buyer or an attractive sales price.

Without the federal backing the FHA provides to mortgage insurance, Wilson said, “you would basically have nothing to sell.”

The task force’s recommendations were hailed by two industry groups, the National Assn. of Home Builders and the Mortgage Bankers Assn. of America.

“Today’s release of the study on the future of the FHA puts to rest the notion of selling the FHA and acknowledges (its) vital role in providing low down payment loans to moderate income Americans buying their first homes,” said James Fischer, a Nashville builder who serves as president of the home builders’ association.

Warren Lasko, executive vice president of the bankers’ group, said his association agreed that “the FHA cannot be sold . . . and it is unlikely that a private corporation could fulfill the social mandate of a government agency.”