This week HUD announced a new initiative titled Homeowners Armed With Knowledge (HAWK) Program in their “Blueprint for Access“. HUD’s “Blueprint for Access” covers the steps that HUD and FHA are implementing to expand access to credit for under served borrowers.
HUD plans on rolling out the 1st stage of the FHA HAWK Program by fall 2014. Thursday the FHA HAWK program notice was published to the Federal Register for a comment period.
The HAWK Program require that Firsttime Homebuyers:
- Complete HUD approved housing counseling BEFORE signing a contract to buy a home, and;
- Complete HUD approved housing counseling BEFORE closing on the mortgage
In exchange for completing the counseling the Firsttime Homebuyer would receive the following benefits:
- FHA’s Up Front Mortgage Insurance Premium (UFMIP) would be reduced from 1.75% to 1.25%, and;
- FHA’s monthly Mortgage Insurance Premium (MIP) would be reduced by 0.10%.
Also, the proposed program would allow Firsttime Homebuyers who complete Post-Closing HUD Approved housing counseling AND show a track record of on time mortgage payments for 2 years to qualify for a further reduction in the Monthly Mortgage Insurance Premium (MIP) of an additional 0.15%.
A Firsttime Homebuyer who completes 3 rounds of counseling (before signing a contract, before closing, and after closing) would see a total reduction of 0.50% on the UFMIP, and 0.25% on the MIP. That is a significant savings over the life of the loan.
Remember, the new program is just now open for public comment, so parameters could, and probably will change. I will update this article with any new info that is released over the next few months.
To check current Ohio FHA mortgage rates, complete the simple FHA Interest Rate Quote form or Contact Me.
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