From the NYT:
"Housing officials say the [Federal Housing Administration] will face a deficit for the first time in its 74-year history, starting in the fiscal year that begins in October. And they blame a rapidly growing and increasingly troubled sector of the F.H.A.’s mortgage portfolio, known as the seller-financed down payment loan program, which has suffered from high delinquency and foreclosure rates in recent years.
Under the program, a home seller arranges to cover the buyer’s down payment — using financial help from a nonprofit company — but typically adds that sum or more to the total cost of the house. The arrangement has been particularly attractive to financially struggling buyers and to owners in depressed housing markets, according to Congressional officials.
In 2000, such mortgages made up less than 2 percent of F.H.A.-insured loans, officials say. By 2007, statistics show, they accounted for 35 percent of F.H.A. loans.
Housing officials say these mortgages have foreclosure rates two to three times those of others, leaving the agency reeling from the losses.
. . .
'These types of loans have pushed F.H.A. to the brink of insolvency,' Alphonso R. Jackson, the housing secretary, told senators recently. 'They are costing hard-working Americans their homes.' Mr. Jackson announced last week that he would resign his post as of April 18".