The FHA HAWK Program for Homebuyers

A few weeks ago, HUD announced a new program created for first time home buyers which rewards them with reduced mortgage insurance premiums after they participate in home buyer education and one-on-one housing counseling. HAWK or Homeowners Armed with Knowledge is a pilot program set be released in two phases on a limited basis.

From the Federal Register:

“Although the exact amount of the incentives and housing counseling and education may change, for the initial year of the pilot, HUD expects that homebuyers who complete pre-contract and pre-closing housing counseling and education prior to the contract of sale of the home (pre-contract) and prior to the loan closing (pre-closing) will receive a one-time 50 basis points reduction in the upfront MIP and a permanent reduction of 10 basis points on the annual MIP at loan closing. After the homebuyer completes post-closing housing counseling and avoids any incidence of a 90-day delinquency on the mortgage payments during the first 18 months post-closing, the homebuyer will receive an additional permanent reduction of 15 basis points on the annual MIP beginning on the second anniversary from the beginning amortization date (the 25th month).”

Eligible borrowers:

• first time home buyers
• must complete: (1) Pre-contract housing counseling and education; (2) pre-closing housing counseling;
• and to receive a further reduction in the mortgage insurance premium, the home buyer must complete (3) post-closing housing counseling with HUD approved counselor

HUD is set to publish a Mortgagee Letter this summer with the first phase of HAWK set for later this year.

I think it’s great the HUD is offering reduced mortgage insurance premiums to first time home buyers who are willing to obtain counseling and attend home buyer education courses.  FHA has become a program that is less favorable to home buyers, despite the reduced down payment, because of the higher upfront and monthly mortgage insurance premiums.

We currently have other programs that are also available to Washington state home buyers who attend home buyer education course, such as Home Advantage and Home Possible, which already has lower mortgage insurance premiums than what FHA loans offer. I recommend not waiting until fall for HAWK, meet with a local mortgage professional to see what programs you may qualify for now. If you’re planning on buying in the fall OR if an FHA loan is your best option, you can still meet with a local licensed mortgage professional to start a game plan NOW to be in a better position for later this year.

Stay tuned!

PS: If you are considering buying a home anywhere in Washington state, I’m happy to help you with your mortgage needs!

NOTE: About the photo…this Osprey (aka Seahawk) is from a mural I did on the garage of our home.