Loans insured by the Federal Housing Administration are popular among today’s homebuyers because they require a minimum down payment of only 3.5 percent and a lower minimum credit score. Now, to make things even better, the FHA has added a new program called Homeowners Armed with Knowledge (HAWK) to assist first-time homebuyers.
The idea behind HAWK is that the more borrowers understand about homeownership, the less likely that are to default on their loans. Borrowers who take the classes can save an average of $325 per year, or nearly $10,000 over the lifetime of the loan. “It may not seem like it, but $10,000 is a lot of savings for a $30,000-a-year household,” said Kimber White, state government affairs chairman for the Florida Association of Mortgage Professionals. “It can make the difference between qualifying or not qualifying to buy a home.”
Under the program, homebuyers take the housing counseling class before signing a contract and complete additional counseling before finalizing the sale in order to earn a 50 basis-point reduction in upfront mortgage insurance and a 10 basis-point reduction in the annual premium cost. An additional 15 basis-point reduction is awarded after two years with no delinquencies.
Public comment on the HAWK program ends in mid-August. The pilot project will start this fall. In the meantime, you can check for eligibility here.
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