The U.S. House of Representatives approved a bill this week that would cut the cost of upfront mortgage insurance fees on Federal Housing Administration loans for first-time home buyers who take part in housing counseling. The bill requires first-time buyers to complete a housing counseling program about sustaining homeownership in order to be eligible for the 25-basis-point discount on their FHA mortgage insurance loan.
The Housing Financial Literacy Act of 2019, H.R. 2162, will next go before the Senate for a vote.
The thrust of the bill is to have first-time home buyers improve their financial literacy through a counseling course certified by the Department of Housing and Urban Development.
“Whether you are managing your credit, creating a budget, saving for retirement, or purchasing a home, understanding the basic principles of planning, saving, and investing for the future is vitally important,” Rep. Joyce Beatty, D-Ohio, who co-sponsored the bill with Rep. Steve Stivers, R-Ohio, said in a statement. “Studies show that pre-purchase housing counseling equips first-time home buyers with the much-needed financial skills and tools to make informed financial decisions that ultimately benefit not only their families but also the surrounding neighborhood and our entire economy.”
The National Association of REALTORS® said in a statement that it supports the bill. NAR President John Smaby said in the statement, “NAR strongly supports efforts to reduce FHA premiums. H.R. 2161 will promote affordable and sustainable homeownership for American families.”
The Mortgage Bankers Association also spoke out in support of the bill, saying the association has long advocated for increased access to housing counseling to support first-time home buyers. The MBA, however, cautioned that any changes to the FHA insurance premiums should be carefully made to preserve the health of the FHA insurance fund and not negatively impact it.
Source: “New Bill Slashes FHA Mortgage Insurance for First-Time Homebuyers,” HousingWire (July 10, 2019)
