On Tuesday May 13th, the Federal Housing Administration released its “Blueprint for Access” in which the FHA outlines a number of proposed plans to expand access to affordable mortgages for underserved borrowers.
Here at the Homeownership Center, we know that stable homeownership is an enormous benefit both for families and their communities, and that successful homeownership is possible through smart choices based on solid information and applaud the FHA for proposing the pilot program Homeowners Armed with Knowledge, or HAWK for short, which seeks to integrate housing counseling into the homebuying process for borrowers using an FHA-insured mortgage.
The HAWK program will offer buyers savings on their FHA-insured loans if they complete housing counseling provided by independent nonprofit organizations like the Homeownership Advisors Network here in Minnesota.
Quoting directly from the proposed HAWK plan: “To increase access, we must identify and implement responsible ways for creditworthy borrowers to obtain mortgage credit. This includes encouraging housing counseling. Responsible access can be enhanced by ensuring borrowers are well-educated about the home-buying and mortgage finance process.”
So what does HAWK mean for buyers?
If the proposed plan is enacted, buyers who complete Homebuyer Education and Counseling before signing a purchase agreement, and also complete a pre-closing counseling session, will qualify for a substantial savings on the Mortgage Insurance Premium (MIP) of their FHA-Insured loans. The proposal calls for a reduction of 50 basis points on the cost of the upfront MIP and a 10 basis point reduction in the annual MIP. PLUS, if buyers complete post-closing counseling and maintain their payments, with no delinquencies, for a minimum of two years after closing, they will see an additional 15 basis points reduction in their annual MIP.
According to FHA, the average FHA loan is about $180,000. These reductions could save buyers over $300 per year, and almost $9,800 over the life of the loan.
What happens next?
The entire HAWK program is, at this point in time, just a proposal and will be open to comment as part of the upcoming Federal Register Notice… so many parts of the program, especially the MIP savings, could change.
If the program proceeds past the comment period, which seems likely, FHA will begin to pilot the program in the fall of 2014. The Minnesota Homeownership Center, as a HUD-Approved Intermediary, looks forward to working with FHA on this program to more-fully integrate Housing Counseling into the homebuying process. We’ll keep you up to date as details of the program become available.
If you are interested in learning more about OTHER affordable mortgage options, some with low down-payment options or options for people with less than perfect credit, speak with a Homeownership Advisor today! Counseling is FREE and available to everyone in Minnesota.
Posted on: Wednesday, May 14th, 2014
Simply put, there’s nothing newsworthy about the number of pre-foreclosure notices issued in the first quarter of 2014 to Minnesota homeowners… and that’s a very good thing! The number of pre-foreclosure notices came in well within expectations and continued in line with the downward trend we have seen since Q3, 2010.
In the first quarter of 2014, Minnesota homeowners received only 5,528 notices, a healthy 41% drop from the number of notices issued in the same quarter of 2013: 5,528 vs. 9,291. The Twin Cities Metro received 56% of the notices issued (3,070) and Greater Minnesota received 44% (2,458).
As always, we use the word ‘only’ cautiously when discussing foreclosures, as it still means that more than 5,500 households are not only struggling with their mortgage, but have fallen far enough behind for their lender or lien holder to begin the foreclosure process.
The Center has put together another infographic to help visualize the data surrounding pre-foreclosure notices:
(Click to Enlarge)
If you, or someone you know, is struggling with to keep up with their mortgage payments, or is worried about a FUTURE payment… don’t delay, contact a Homeownership Advisor that specializes in foreclosure today! To learn more, or to contact your local organization, click here.
Posted on: Tuesday, April 15th, 2014
On Wednesday January 29th, the Minnesota Homeownership Center released its 2013 year-end data on the aggregate number of Pre-Foreclosure Notices received by foreclosure prevention specialists in the Homeownership Advisors Network. The number of pre-foreclosure notices issued continue to show improvement in Minnesota’s housing market.
The Center has produced an infographic to help visualize the data on pre-foreclosure notices:
For a PDF version of this graphic, click here.
Posted on: Wednesday, January 29th, 2014
The U.S. Department of Housing and Urban Development (HUD) has announced the Minnesota Homeownership Center’s designation as a HUD Approved Housing Counseling Intermediary.
HUD has been working to strengthen its partnerships with strong networks of multiple counseling agencies in order to leverage resources and improve consumer access to housing counseling services at the local community level. Recognized by HUD for its 20+ years of promoting and advancing successful homeownership through its network housing counseling agencies, the Center will now oversee a network of 20 HUD-approved housing counseling agencies offering housing services in pre-purchase education, one-on-one homeownership counseling, rental information, Fair Housing guidance, rehabilitation programs, Reverse Mortgage Counseling, homeless prevention support, and foreclosure prevention options.
As more first-time buyer loan programs, down-payment assistance and foreclosure avoidance programs require access to HUD-Approved counseling, the Center is pleased to be able to be a resource for consumers and counseling agencies throughout the state. With this new designation we also hope to be able to secure additional HUD funding for housing counseling services in Minnesota.
“We know that homeownership counseling and personalized assistance that help families achieve financial wellness are the best tools to prevent another housing crisis like the one we’ve recently experienced,” stated Ed Nelson of the Minnesota Homeownership Center. “Looking forward, The Center’s Network will continue providing education, guidance and resources to Minnesota families.”
Currently, the Center will continue all activities as usual, overseeing the Homeownership Advisors Network*. A complete list of agencies that are participating in our HUD intermediary network will be posted here on our website in the coming months. In addition, the Center will continue to embrace emerging technologies and tools that will prepare thousands of families for successful, sustainable homeownership and will continue to expand programming for partner agencies that will ensure that the Homeownership Advisors Network is on the cutting edge of housing and financial stability trends.
*Not all current members of the Homeownership Advisors Network will be participating with us in this HUD endeavor. Additional details will be posted soon.
Posted on: Tuesday, January 7th, 2014