Single Family Housing
Investment ID: 025-000000091
Overview
Program Title
Single Family Housing
Description
This investment captures all the systems that support HUD's Single Family programs including mortgage insurance on loans to purchase new or existing homes, condominiums, manufactured housing, houses needing rehabilitation, and for reverse equity mortgages to elderly homeowners. HUD is carrying out a multi-year investment called FHA Catalyst that began in 2019 to modernize FHA's infrastructure and to provide cloud based platforms to reduce costs, risks and fraud, and bring FHA in line with current industry practices. The modernization approach is flexible with an agile approach, and includes a single portal for lenders to interact with FHA for the full loan life cycle. Loan components are already in production, providing rapid turnaround and efficiencies to the agency and to the lender community.
Type of Program
Major IT Investments
Multi-Agency Category
Other
Investment Detail
FHA is the world's largest mortgage insurer, with a total portfolio of single-family mortgages in excess of $1 trillion and is directly responsible for approximately 15% of all residential mortgages made in the US annually, targeting low-income, first-time and other targeted homeowners. The many benefits include fast-feedback mortgage applications, Mortgage Industry Standards Maintenance Organization (MISMO) data standards, API-driven integration, active loss mitigation guidance and superior data and risk analytical capabilities. The technology will enable a trust but verify approach of granular monitoring and oversight that better protects the taxpayer without placing an undue burden on FHA staff and resources. The Salesforce cloud based platform and functionality will allow the reduction in current contract spending on legacy systems and will also provide substantial efficiencies to lenders and FHA staff, including the use of on-line transactions and electronic documents to replace paper and mail based processes. Furthermore, the modernized platform will be leveraged by other HUD loan programs including Native American Programs and Multi-Family Housing for their modernizations, greatly reducing future development and operating costs.
The overall multi-year planning and development cost for the full modernization is estimated at $91 million. Besides all the benefits to the lender community, once the migration to the cloud is completed and all loan applications are built out, HUD is expected to achieve about $10 million of net annual savings in O&M costs, $8 million from retiring the separte Unisys Migration investment, and a still to be determined amount in infrastructure costs when the IBM Mainframe is retired. There will also be significant operational savings to the FHA program from automating the processes. We currently estimate at least $30 million of continuing annual savings directly to FHA.
The overall multi-year planning and development cost for the full modernization is estimated at $91 million. Besides all the benefits to the lender community, once the migration to the cloud is completed and all loan applications are built out, HUD is expected to achieve about $10 million of net annual savings in O&M costs, $8 million from retiring the separte Unisys Migration investment, and a still to be determined amount in infrastructure costs when the IBM Mainframe is retired. There will also be significant operational savings to the FHA program from automating the processes. We currently estimate at least $30 million of continuing annual savings directly to FHA.