First-timers can take a class, save on loan
The Federal Housing Administration will be ending its public comment period in mid-August on a proposed program that would allow first-time homebuyers to get a discounted mortgage if they enroll in housing counseling classes.
The program, called Homeowners Armed with Knowledge (HAWK), was announced last month by the FHA as way to curtail homebuyers’ mortgage insurance premium costs. FHA is operating under the assumption that the more borrowers understand about home ownership, the less likely they are to default on their loans, thereby decreasing their lending risk.
To be eligible for the discount, borrowers must take several courses before and after closing. FHA says consumers could save an average of $325 a year or nearly $10,000 over the life of the loan.
FHA officials say the classes could make the difference between qualifying or not qualifying to buy a home.
The courses will be taught by agencies approved by the U.S. Department of Housing and Urban Development. FHA hopes that borrowers will be able to apply for the program by the end of the year.