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The Federal Housing Administration is facing a $16.3 billion shortfall and is expected to need taxpayer aid to cover its losses, according to an independent audit released Friday. This would be the first-time the , in its nearly 80-year history, would require a government bailout.

The agency says home prices have not risen as quickly as they forecasted, and interest have caused less return as well. A high number of mortgage delinquencies from the bubble has also caused the agency to come up short.

“We will continue to take aggressive steps to protect FHA’s financial health while ensuring that the FHA continues to perform its historic role of providing access to home ownership for underserved communities and supporting the housing during tough economic times,” says Carol J. Galante, FHA’s acting commissioner.

The FHA says it has seen improvement lately with its portfolio. But several loans insured between 2007 and 2009 that became delinquent have caused an estimated $70 billion in losses alone, proving to be “significant” strain on FHA’s finances.


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