The Federal Housing Administration (FHA) issued a news release announcing its "Blueprint for Access".
This blueprint outlines the additional steps the FHA is taking to expand access to credit for underserved borrowers. These steps include encouraging a broader use of housing counseling and homebuyers will qualify for savings on their FHA-insured loans by completing HUD-approved housing counseling provided through independent nonprofit organizations.
This counseling is aimed at improving buyers' budgeting skills, housing decisions, and understanding of the responsibilities of homeownership. In addition, the Blueprint for Access includes enhancing FHA's quality assurance efforts. HUD announced more information on FHA's Quality Assurance Initiative, intended to provide greater clarity and transparency to FHA approved lenders to encourage lending to qualified borrowers across the credit spectrum."This is a win for families, FHA, lenders, realtors and the overall market, which is why we are very excited about its potential impact, said Shaun Donovan, Secretary, U.S. Department of Housing and Urban Development. "We want to create an environment that encourages responsible behavior and provides clear rules of the road so lenders can originate loans without fear of unanticipated consequences. We want lenders to be able focus on the quality of their processes and lend to all qualified borrowers."Under the four-year new pilot program called Homeowners Armed with Knowledge (HAWK), new homebuyers who commit to housing counseling will qualify for tangible savings on their FHA-insured loans.
The average buyer would save approximately $325 a year – or almost $9,800 over the life of their loan. FHA proposes that homeowners who complete housing counseling before signing a contract to purchase a home and who complete additional pre-closing housing counseling will receive a 50-basis point reduction in the upfront FHA mortgage insurance premium (MIP) and a 10-basis point reduction in the annual FHA MIP.After two years with no serious delinquencies, participants receive an additional 15-basis point reduction in annual MIP. FHA stated that the HAWK program is a strong step toward integrating housing counseling into the home buying process.
Lauren Bunting is a licensed REALTOR®with Bunting Realty, Inc. in Berlin.
Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.
