First-Timers: Take a Class, Save on Your Loan
The Federal Housing Administration will be ending its public comment period in mid-August on a proposed program that would allow first-time home buyers 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 home buyers' 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.
“It may not seem like it, but $10,000 is a lot of savings for a $30,000-a-year household,” says 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.”
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.