FHA will book it as a subordinated capital note, and therefore treat it as tier one equity. Of course this is all accounting rubbish. Just what's necessary to maintain the charade. - Speaking of charades and accounting rubbish, the loan from FFB will not be reflected in America's debt profile. The FHA loans are not part of the Debt Subject to Limit. That's just the rules of this game. Loans to Solyndra were guaranteed by DOE, so the money Treasury borrowed to make the bad loans to Soly never showed up on the books. Talk about a neat trick! - Treasury will issue a few more notes to the public to come up with the cash that FHA needs to honor its guarantees. That's not a problem at all. Maybe Bernanke will buy some of the paper, just to keep a necessary balance. - With Ben B Zirping, the Vig for the FHA will come in at a very low rate. The FHA will borrow $30-40Bn and not pay a dime over 3/4 percent. Can you say "magic? The foregoing is well more than a guess on my part. There is a road map for this type of problem. The FDIC was down to nickels back in 1991. It got a line of credit from the FFB for $30Bn. Later the FDIC line was increased to $100Bn. When the SHTF in 2009 the line went to a cool half trillion. When it comes to providing credit to government agencies that