Business Notes MORTGAGE INSURANCE

The alphabet soup of troubled Government loan programs has added three new letters: FHA. Housing Secretary Jack Kemp contended last week that the largest Federal Housing Administration fund is running out of money. The Mutual Mortgage Insurance Fund, which guarantees about 690,000 home loans each year, has suffered a high rate of defaults because of sloppy supervision and falling real estate values. The fund's net worth has plunged from $8 billion in 1979 to $2.6 billion currently. Kemp has outlined a five-point plan to keep the fund solvent. His proposal would improve management and increase the premiums and fees homebuyers pay on FHA-insured loans. The unfortunate side of the tighter conditions is that as many as 35,000 lower-income families may not be able to afford the higher costs.