The Federal Housing Agency recently announced it is expanding access to mortgage credit for underserved borrowers. In its BluePrint for Access, the FHA proposes that under its Homeowners Armed with Knowledge (HAWK) Program, homeowners who complete housing counseling both before and after closing will receive a “50 basis point reduction in the upfront FHA mortgage insurance premium (MIP) and a 10 basis point reduction in the annual MIP.” FHA sees the HAWK program as a way to extend credit while also reducing defaults, as delinquencies are 29% lower among first-time homebuyers who receive housing counseling. On the average FHA loan balance of $180,000, the FHA estimates these savings to add up to nearly $9,800 in savings over the life of the loan. The FHA is set to implement Phase I of the HAWK Program this Fall 2014.
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