It probably comes to you as no surprise ...
Hopeful home buyers are struggling to save the funds and down payments needed to purchase homes. Many are also finding that securing their mortgage financing can be a bit of a challenge.
FHA (Federal Housing Administration) loans have long been a source of financing for home buyers, especially those that have been "down payment challenged" and First-Timers. But as of late, the costs that accompany FHA financing have increased. Increased to the point where many potential Home Buyers believe FHA Mortgages no longer make sense for them.
What are the typical costs seen? The National Association of Realtors (NAR) estimates that currently, almost 20% of a FHA loan's monthly mortgage payment can be attributed to FHA fees.
But FHA has now taken steps to address those higher costs. It announced (May 13th, 2014) * it will be expanding its services to Home Buyers through its "Blueprint for Access" program called "Homeowners Armed With Knowledge" ... or HAWK. *No exact start date was given for these changes... stay tuned.
This new HAWK program will reduce the upfront costs charged on Mortgage Insurance Premiums by 50 basis points. It will also offer a 10 basis point reduction of the premium due at the time of Mortgage Origination to First-Time Home Buyers that complete its housing counseling program.
The new HAWK - FHA counseling program will address the following Home Buyer topics:
- Budgeting Skills
- Responsibilities that accompany Home Ownership
- Housing & Housing Market Decisions
- Lending/Mortgage Process
- Credit and Credit Risks
It is estimated that the average FHA Home Buyer will reap a savings of approximately $325 a year and almost $9800 over the life of their Mortgage should they participate in the new counseling program being offered.
This FHA counseling will have to be completed prior to signing of the Sales Contract for purchase of a home.
Those Home Buyers that exhibit a 2-year history of no serious Mortgage delinquencies ... and that choose to participate in post-Closing counseling, will receive even further benefits. They will receive an extra 15 basis point reduction in their Annual Mortgage Insurance Premium.
This latest news, paired with the announcement by FHA Director Mel Watts that the government will "step-back" from its plan of reducing Mortgage Loan Limits for Fannie Mae and Freddie Mac, will hopefully provide a much-needed boost to the number of those capable of entering the housing market. Certainly the number of Buyers fully-aware and fully-educated about Home Ownership and the Mortgage Process they are entering will grow.
FHA Announces New Blueprint for Home Buying Success: "Homeowners Armed with Knowledge" ... Should you be a hopeful potential Home Buyer in the Chicago area and interested in learning more regarding this new FHA program (HAWK) program ... and if it can help you in your pursuit of home ownership, contact me immediately.
We'll talk, then take action to get you started towards making your dream a reality ...
* Implementation Date to be announced
I can be easily found at any of the following:
Gene Mundt, Mortgage Lender
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