Earlier this week the Housing and Urban Development Department (HUD) announced “Blueprint for Access” which outlines the additional steps that FHA is taking to expand access to credit for under served borrowers.
Today HUD published a notice in the Federal Register for comment. The notice is Federal Housing Administration (FHA): Homeowners Armed with Knowledge (HAWK) for New Homebuyers.
HUD plans on implementing the first phase of the FHA HAWK program in the Fall of 2014. The proposed plan would allow Firsttime Homebuyers to pay a reduce Up Front Mortgage Insurance Premium (UFMIP) of 1.25%, compared to the regular UFMIP of 1.75%, and reduce the monthly mortgage insurance premium (MIP) by 0.10%, currently MIP varies depending on the term of the loan (30 year, 15 year, etc.) and the amount of down payment. In order to qualify for the lower UFMIP and MIP, the Firsttime Homebuyer would be required to complete counseling before signing a contract to buy a home, and complete counseling prior to closing of the mortgage loan. The HUD-approved counseling is provided through independent nonprofit organizations.
In addition to the reduced UFMIP and MIP at the time of closing, Firsttime Homebuyers that choose to take part in Post-Closing counseling and show a track record of timely mortgage payments for two years would qualify for an additional reduction in their MIP of 0.15%.
All in all, it seems that HUD and FHA are moving in the right direction after imposing increases to the MIP four times in the last few years. As more details are released, prior to FHA HAWK rolling out, I will update this article. Hopefully HUD is on track to assist potential Ohio FHA homebuyers.
Head over to the Ohio Mortgage Rate Quote request form to check on current mortgage rates.
