FHA Announces New Blueprint for Home Buying Success: "Homeowners Armed with Knowledge"

Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI


FHA Announces New Blueprint
for Home Buying Success:
"Homeowners Armed with Knowledge" 


     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

Direct:  815.524.2280
Cell or Text:  708.921.6331
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656


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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Praful Thakkar 05/14/2014 02:09 PM
  2. Bill and MaryAnn Wagner 05/14/2014 11:55 PM
  3. Alliance Realty Group LLC 05/15/2014 09:36 AM
Home Buying
Illinois Will County Joliet
Chicago Area Real Estate BUZZ!
1st Time Buyers
mortgage fees
mortgage insurance
home buyers
fha financing
borrower counseling
mi premiums
costs of borrowing

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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Gene, I am so glad you posted this as this is giong to help so many.

May 14, 2014 12:29 PM #12
Janis Borgueta
Key Properties of the Hudson Valley - Newburgh, NY
LIC RE Salesperson

Thanks for the info Gene. always on top of the newest thing in the mortgage business. Great we can tell clients about this. Apparently this will take a bit more prep time for buyers but well worth the process.

May 14, 2014 01:09 PM #13
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Gene, may be a small step in right direction - and perhaps getting more buyers go for it! With the current scenario, the only way buyers go for is DTI - as per my limited knowledge of financial industry.

May 14, 2014 02:08 PM #14
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher
Back in the day, there wasn't the Internet and there wasn't all this opportunity for getting resources and becoming informed as there is now. There's really no excuse to not be informed now other than not wanting to look it up. To prosperity, Laura
May 14, 2014 02:23 PM #15
John Jonas
ReplaceMyself - Virtual Assistants - Highland, UT
John Jonas

This sounds good. Very helpful to those home buyers, especially the first timers. Product knowledge is very important and with this small step, it surely can help educate a lot of people.

May 14, 2014 02:29 PM #16
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

It's about time!  The high PMI and other fees make these loans so expensive! Great post Gene - Suggested! 

May 14, 2014 02:54 PM #17
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Woo hoo...great news and let's hope it spreads quickly !

May 14, 2014 09:27 PM #18
MaryKay Shumway
The Kellstrom Ray Agency, Inc. (Est. 1948) - Sister Bay, WI
Door County Wisconsin's Real Estate Expert

Great post, as always, and I can't wait to share information that this is in the works with Buyers....hoping you do an update prior to the actual launch.

May 14, 2014 10:31 PM #19
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Interesting ? Will Mortgage Originators get certlfied to present these classes ? How local will these be rolled out ?

May 14, 2014 10:41 PM #20
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Thanks, Gene, for sharing. I saw this too. Perhaps this will help us also. Take care.

May 14, 2014 11:17 PM #21
Bill and MaryAnn Wagner
Wagner Real Estate Group - Ocean City, NJ
Jersey Shore and South Jersey Real Estate

Welcome information George. The fees for FHA financing have gotten out of hand. Look forward to the details and start date.

May 14, 2014 11:52 PM #22
ReadySetLoan Condo Approval Team
ReadySetLoan Condo Team LLC - South Windsor, CT
The FHA/VA Condo Project Approval Specialists

Super article, Gene.  I am hopeful that making these changes will help to increase the attractiveness of FHA loan products.  It's obvious that FHA had to make adjustments so as not to risk the insurance fund or receive taxpayer monies to survive.

May 15, 2014 12:13 AM #23
Kate McQueen
CB&A Realtors - Cypress, TX
Tailored service for your real estate needs!

Hate to be a downer but life of the loan MI is still a detriment to using the FHA loan, unless of course a buyer knows they will sell within a few years, or they have a crystal ball and know they can refinance at a similar rate as the original loan.

May 15, 2014 12:45 AM #24
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Michael:  In all the articles and press release I saw regarding this new announcement and program, there were some very important details still missing regarding HOWs, WHENs, WHOs, etc.  The benefits reaped by clients and the industry as a whole will rest greatly on those details, when released.  Time will tell ... as always ...

Kathy:  Great .. love hearing that!  The info was positive and upbeat.  Hopefully details will follow soon.

Debbie:  I'm sure hoping you're right ... the help is definitely needed.  Both by our clients .. and the economy/industry as a whole ...

Janis:  True ... Borrowers will need to start the process earlier than they currently are in order to reap the benefits.  But you and I are both aware of the savings they will reap, should they make that effort and take the time.  I'm hopeful at this point.  Will make sure I follow-up with details as they become available from FHA ...

Praful:  I agree ... this hopefully opens the doors for more Buyers to walk thru.  Who couldn't be excited about that??

Laura:  So true ... when I started in the business way back in 1977 .. things were VERY different.  It's easier in many ways to obtain the info needed.  What makes it harder is sifting through ALL available ... winnowing out what doesn't personally apply to your scenario ... and throwing out the old/incorrect info.  That can be a challenge!

John:  I wish that counseling was mandatory in MORE cases of Borrowing and Buying of homes.  It would benefit buyers so much ...

Jan:  You're right ... I try to avoid the current PMI costs whenever possible and other options exist.  The costs can be downright painful for Buyers ...

WooHoo is right, Sally!  Hopefully the details follow SOON!

Definitely will, MaryKay.  As soon as FHA releases that info ... I'll get it on AR!

Michael:  I can't answer those questions right now, as those details were not provided along with the announcement/roll-out.  I am assuming that all counseling will be provided by FHA itself, not we Originators.  But the counseling they do is typically VERY local and choices of locations offering the counseling are numerous.  That has always been the case in the past and again .. I'm assuming that will remain the case now.  Great questions ... thanks!

Paul:  I am too ... it's my own little "trickle down" theory.  Borrowers have more options and better options ... so do we in the real estate and mortgage industry ...

Bill & MaryAnn:  I promise as soon as it's available, I will post that info here on AR.  You and I are not alone in our anticipation ...

Eric:  True!  Good to see that they are evolving and addressing the issues (at least some) that exist.  They needed to or would soon go the way of the dinosaur ...


May 15, 2014 12:54 AM #25
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Kate:  While true that ANY extra costs are negatives for a Borrower, I still judge this in degrees.  For those that want to buy, have little monies/savings, and fewer options ... this can be a positive.  That said, how big a positive will be decided by the details yet released ...


May 15, 2014 12:57 AM #26
Tamara Liggins
Keller Williams Realty, Saint Louis Call Me today at 314.677.6104 - Florissant, MO
Bringing Buyers & Sellers to Homes!

I'm hoping that it has some sort of grandfathered clause. That would be great and allow a better flow for the economy it will also allow the opportunity for current FHA borrowers to redirect funds to other items such as keeping the same amount sent in on their mortgage each month but possibly paying off sooner as a bonus or if trying times come they have a few more dollars available to their households. I think the FHA programs can be a great thing in some markets sometimes we still have lenders that toss out the preapproval though and don't explain in the end going through underwriting with that MI can throughout the debt to income ratio. Almost had that pull a deal apart because the buyer came in .01% over the debt to income ratio during the loan process after the lender failed to lock rates when the borrower requested which resulted in a higher interest rate than the GFE originally had. 

Most of all I have faith that programs designed to help with and can be overhauled for the good of buyers and agents alike.

May 15, 2014 03:59 PM #27
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I will bookmark this post and read it again. Thanks for the information.

May 15, 2014 08:24 PM #28
Rob Spinosa
Guaranteed Rate, Marin County, CA - San Anselmo, CA
SVP of Mortgage Lending, Marin County

FHA borrowers are an important part of the real estate food chain and HUD has neglected this in a shortsighted bid to bolster its insurance fund.  Unless these homeowners get in via FHA, you've taken out your future "move up" buyers as well as your first-time buyers.  Any steps taken to address the harm they've done is welcomed in my opinion.

May 16, 2014 12:55 AM #29
A. J. Zaki
REMAX Realty Pros - Boca Raton, FL
Home Finder In Florida

                                                                                                                    Thank you for sharing! I look forward to more posts from you.

May 16, 2014 01:57 AM #30
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Tamara:  Thanks for your input.  Education is important, obviously on the side of the Lender offering the opportunities to learn and understand ... but also on the side of the Client.  Clients can best protect themselves and make wise decisions when fully versed on their options.  As far as a "grandfather clause", I saw nothing mentioned of this feature in the new FHA announcement.  I will update the info I offer here on AR as more info becomes available via FHA ...

Thanks, Gita.  Feel free to ask me questions should you have any ...

Rob:  I agree.  I choose to remain hopeful and positive ...

Thank you, A.J.!


May 17, 2014 05:03 AM #31
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