FHA loans are (were) a wonderful program for first time buyers who could not save sufficiently to pay 20-25% down on the purchase of a home until they changed the rules about mortgage insurance adding hundreds of dollars to a monthly payment. The Department of Housing and Urban Development (HUD) is welcoming comments on a new program they are proposing named HAWK which stands for Homeowners Armed with Knowledge. If a buyer participates in housing counseling and pre-closing house counseling they can reduce the amount of upfront FHA mortgage insurance…..HUD is in a 60 day comment period now….
Under the four-year pilot program, homebuyers who commit to housing counseling will qualify for tangible savings on their FHA-insured loans. FHA proposes that Homeowners who complete housing counseling before signing a contract to purchase a home and who complete additional pre-closing housing counseling will receive a 50 basis point reduction in the upfront FHA mortgage insurance premium (MIP) and a 10 basis point reduction in the annual FHA MIP. Choosing to participate in post-closing counseling and a track record of timely mortgage payments will bring even greater benefits. After two years with no serious delinquencies, participants receive an additional 15 basis point reduction in annual MIP.
HAWK program questions and answer, FAQ’s