WASHINGTON -- The Federal Housing Administration wants Congress to let the agency insure up to $130 billion in home mortgages both this year and next.

Housing and Urban Development Secretary Andrew M. Cuomo told a House Appropriations subcommittee yesterday that this year's cap of $110 billion is too low for the FHA to meet homebuyers' demand. HUD, which oversees the FHA, originally asked for a cap of $120 billion in its fiscal 2000 budget.

Raising the cap would allow the FHA to insure an additional 400,000 mortgages this year at no cost to taxpayers.

The insurance program is supported by the premiums borrowers pay for the FHA insurance on their privately held mortgages.

"Allowing the FHA to insure more loans won't cost taxpayers a dime, and it will help families across our nation build better lives as homeowners," Cuomo said in a statement.

Cuomo said the increase in FHA loan applications is a result of a strong economy and Congress' agreement last year to raise the amount of a mortgage the FHA can insure from $86,000 to $115,200 in poor areas and from $170,000 to $208,800 in wealthier communities.

Pub Date: 3/11/99