A recent report from Harvard University’s Joint Center for Housing Studies argues for more flexibility for the Federal Housing Administration (FHA). The report asserts the organization should be run more like a traditional corporation.

Despite being designated a “government corporation,” FHA is “subject to numerous statutes and regulations relating to public disclosure, personnel, procurement, financial reporting, and oversight that impinge on its ability to adapt its product line quickly to an ever-changing market,” the report states.

Harvard researchers propose the FHA function under the rule of a CEO who is nominated by the president and confirmed by the Senate. He or she would be held accountable by Congress.

The CEO would also have an advisory board “appointed by key congressional leaders.”

Much like private corporations, the FHA would be subject to periodic stress tests and financial reviews to ensure its soundness.

Under direction of the advisory board and the CEO, the FHA would be free to enact its own hiring process, manage its own budget, set its own pricing, and adapt to market changes “without Congress legislating each change or mandating numerous complex or inconsistent rules and regulations,” according to the researchers’ plan.

The new FHA would continue to serve low-income families and would work to provide an alternative to the common prepayable, 30-year, fixed-rate loan.

The report also suggests the new FHA expand down payment assistance programs to private and nonprofit organizations. Currently, most are run by state and municipal organizations.

While admitting that “[f]ew decisions are more important, more complex, and more controversial than determining the future of Fannie Mae and Freddie Mac,” the Center stressed the importance of the secondary market in providing access and affordability in the mortgage market.

The report cited a commonly-held belief that without government backing, private capital would not meet the needs of certain “difficult-to-serve markets.”

“It is also questionable whether, in a world with more limited government guarantees, the private sector would even serve the broader market for longer-term fixed-rate mortgage products,” the report states.