The Federal Housing Administration is getting closer to issuing a final rule that would reduce mortgage insurance premiums for potential homebuyers who complete housing counseling courses.
"Right now we are working through the details," acting FHA Commissioner Biniam Gebre said last week. "We expect to come out with a final rule in the next couple of months." Gebre has replaced former FHA Commissioner Carol Galante who left the agency in late October.
The FHA charges high mortgage insurance premiums as it strides to recapitalize its mortgage insurance fund. However, the FHA commissioner says it makes sense to reduce premiums for borrowers that go through housing counseling because they are more prepared for homeownership and less likely to default.
He noted that the FHA was "flooded with great comments" on the housing counseling initiative known as HAWK — Homeowners Armed With Knowledge — and is taking longer than expected to incorporate the changes. "We are spending a lot of time on it and we want to get it right."
The FHA and the White House are committed to HAWK. Gebre specifically noted that President Obama supports the HAWK initiative.
"We are very concerned about the uneven nature of the overall economic recovery. Low-income and middle-class families are still struggling with stagnant wages, high rental costs and access to credit," Gebre said at a housing symposium sponsored by the law firm Ballard Spahr LLP.
The commissioner also stressed that FHA is working to improve its multifamily insurance program and on initiatives to increased private investment in public housing rental projects.
However, access to mortgage credit is a problem, he said. "We have a huge affordable rental crisis but that is partially being driven by the fact that less and less people are able to get a mortgage because of credit issues."
Besides HAWK, the FHA commissioner did not mention any other initiatives to reduce FHA premiums.
