Homebuyer Assistance Program News

9/24/01: Soldiers' And Sailors' Civil Relief Act Invoked

According to HUD, reservists and members of the National Guard called to active duty will receive a cut in their home loan interest rates under the provisions of the 1940 Soldiers' and Sailors' Civil Relief Act. As a resul, HUD is advising all FHA-approved lenders to reduce mortgage interest rates to no more than six percent for military personnel on active duty.

In addition, on September 26, 2001, the Director of VA’s Loan Guaranty Service issued VA Circular 26-01-10 providing extensive guidance on the Soldiers' and Sailors’ Civil Relief Act of 1940, as amended.The purpose of the Act is to promote and strengthen the national defense by suspending enforcement of certain civil liabilities of certain persons serving in the armed forces. Therefore, when a borrower's ability to meet his or her obligations has been impaired due to military service, certain relief is afforded against the penalties that would otherwise be imposed for nonpayment of such obligations. The relief provisions also include the right, in some cases, to make reduced payments on obligations, and also protections through the courts against foreclosure. Members of the Reserves or National Guard who have home loans, and are called to active military service, may also be entitled to protection under the Act. Benefits under the Act may also extend to co-obligors on a loan. For more information on the Act and its provisions, please see VA Circular 26-01-10 at http://www.homeloans.va.gov/docs/26_01_10.doc.

9/18/01: Fannie Mae, Freddie Mac and HUD/FHA Offer Relief for Victims of Sept. 11, 2001, Terrorist Attacks

Fannie Mae announced that its lenders should apply the disaster relief provisions outlined in its Servicing Guide to borrowers affected by the September 11, 2001, terrorist attacks on various sites within the United States. These disaster relief provisions normally are available for use by mortgage servicers in cases of natural disasters. But due to the extraordinary nature of this week’s terrorist attacks, and the ensuing disruption to families and normal business activities, Fannie Mae is extending the relief provisions to this instance as well.

Fannie Mae’s disaster relief provisions give mortgage servicers the discretion to help borrowers in several ways, including suspending or reducing mortgage payments for a time, or, in some circumstances, creating longer loan payback plans, resulting in a lower monthly payment. All changes will be made on a case-by-case basis. Homeowners who are experiencing hardships should contact the lender to whom they send their monthly mortgage payments. Borrowers also may contact Fannie Mae’s Consumer Resource Center at (800) 7FANNIE (800-732-6643), Monday through Friday, 9:00 a.m. to 5:00 p.m. EDT. For more information, visit Fannie Mae's Web site at www.fanniemae.com.

Freddie Mac announced its "Peace of Mind Plan" to prevent borrowers with Freddie Mac-owned mortgages from losing their homes as a result of the Sept. 11 terrorist strikes. Specifically, Freddie Mac called on the lenders servicing its mortgages to extend every option available under Freddie Mac’s business policies to help borrowers directly or indirectly affected by the terrorist attacks.

Freddie Mac asked its servicers to protect the credit of affected borrowers by not reporting their delinquencies to credit bureaus. The company also announced it is suspending all foreclosure actions nationwide until Sept. 25 and is extending the foreclosure moratorium until Oct. 1 in the East Coast and California, where most of the families affected by the attack live. Freddie Mac also is extending to the firefighters, police officers, and others actively engaged in rescue operations at the World Trade Center, the Pentagon, and air crash sites what relief may be necessary to ensure that their mortgage obligations do not become an obstacle to the rescue effort. For more information, visit Freddie Mac's Web site at http://www.freddiemac.com.

The U.S. Dept. of Housing and Urban Development (HUD) issued Mortgagee Letter 01-21 directing all FHA-approved lenders to provide relief to families with FHA insured mortgages affected by the recent terrorist attacks. Affected borrowers are those individuals who were passengers or crew on the four hijacked airliners, individuals employed on September 11, 2001, in or near the World Trade Center or in the Pentagon, and individuals whose financial viability was affected by the events of that day.

Relief actions included a 90-day moratorium on foreclosure of any FHA-insured single-family mortgage in which an affected borrower is an owner-occupant of the property securing the mortgage; a request that mortgagees waive all late charges for affected borrowers; and that mortgagees suspend the reporting of delinquencies of affected borrowers to credit bureaus, beginning with the September installment.

HUD also indicated that its Homeownership Centers may, on a case-by-case basis, endorse mortgages that are delinquent, if at least one of the mortgagors is an affected borrower, and the delinquency was related to the terrorist attack. For more information, visit HUD's Web site at www.hud.gov

8/2/01: HUD Resumes Officer, Teacher Next Door Programs

After a four-month suspension, HUD's Officer Next Door and Teacher Next Door programs officially were resumed August 1 after the department implemented measures to prevent abuse of the programs. The programs offer police officers and teachers a 50 percent discount on HUD-owned, single family homes in certain designated revitalization areas. The homes become available to HUD after homeowners default on their FHA-insured mortgages. HUD has suspended the program after following nine felony convictions and 15 indictments involving police officers who purchased homes.

More info: HUD

7/23/01: House Takes Steps To Enact FHA Adjustable-Rate Mortgage

The House Appropriations Subcommittee on VA/HUD/Independent Agencies has marked up a fiscal 2002 appropriations bill that included a provision authorizing creation of a hybrid FHA adjustable-rate mortgage program. NAR is a strong supporter of the mortgage product and is actively advocating for adoption of the feature. The program was almost enacted last year under affordable housing legislation but was deleted at the last moment in the Senate.

In addition to the hybrid FHA ARM the subcommittee provided $30 billion for HUD programs, $550 million less than the Bush Administration requested. The bill provides $15.7 billion for the Section 8 housing certificate fund to renew all expiring contracts and fund 34,000 new vouchers, and the bill provides $4.4 billion for the Community Development Block Grant program. The bill now proceeds to the full House Appropriations Committee for consideration.

7/18/01: Californians To Receive Over $553 Million in HUD Funds

California will receive more than $553 million in federal assistance to stimulate local economies, promote affordable housing and help the homeless and people living with AIDS, the U.S. Dept. of Housing and Urban Development announced. According to HUD, $355.4 million will be allocated to Community Development Block Grants (CDBG) to fund local economic development priorities benefiting low- and moderate-income residents; $156.3 million will be allocated for HOME funds to promote affordable housing programs for low-income families; $12.6 million will be allocated Emergency Shelter Grants (ESG) to meet the urgent needs of the homeless; $18.3 million will be allocated for HOPWA (Housing Opportunities for Persons With AIDS) grants to provide housing and related services to low-income people with HIV/AIDS and their families; and $10.3 million will go toward loan guarantees made under HUD's Section 108 Loan Guarantee Assistance Program. Visit HUD for more information.

7/11/2001: Report Indicates Increasing Number of American Families Have Critical Housing Needs

The National Housing Conference, a coalition of public- and private-sector affordable-housing experts, released a report recently that indicates a growing number of working families have critical housing needs. According to the report, "Paycheck to Paycheck: Working Families and the Cost of Housing in America," working families with critical housing needs increased to 3.7 million in 1999—up from 3 million in 1997. Moreover, 80 percent of the families studied pay more than half of their income for housing while the remaining 20 percent live with severely inadequate housing conditions. The full report is available online at www.nhc.org

7/6/2001: National Association of REALTORS® Submits Affordable Housing Recommendations

This week NAR submitted to the Millennial Housing Commission its views and recommendations encompassing affordable housing. The Millennial Housing Commission was created by Congress in 2000 to develop legislative and regulatory recommendations to improve the delivery of housing services and expand affordable housing opportunities. The Commission's findings and report is due to Congress March 2002. NAR's document lays out constructive ideas and recommendations pertaining to closing the homeownership gap; creating underwriting and financing incentives, stimulating affordable rental housing, improving access to housing and enhancing the mission and delivery of existing federal housing programs. A full copy of NAR's document is available at http://nar.realtor.com/gov/millenial2.htm

4/4/01: Low-Income First-Time Buyers Get Additional Funds

Low-income, first-time homebuyers in select cities and counties throughout California can benefit from funding provided by the Federal Home Loan Bank of San Francisco, which announced $6.6 million in matching grants for buyers in Arizona, California, Colorado, Florida, Maryland, New Jersey and Pennsylvania.

Under the Bank’s Individual Development and Empowerment Account (IDEA) program, borrowers can receive up to $10,000 for downpayment or closing costs. Participants can earn up to 80 percent of their region’s median income but must be enrolled in a Family Self-Sufficiency or Individual Development Account program and meet other eligibility requirements. Visit www.fhlbsf.com for more details.

3/30/01: Freddie Mac Teams with Pasadena, Calif., Lender to Offer Mortgages to Muslim Families

Freddie Mac partnered with American Finance House--LARIBA to offer home financing contracts that are acceptable under both Islamic and American law, paving the way for a major expansion in affordable homeownership opportunities for observant Muslim families in this country. Freddie Mac has invested an estimated $1 million in contracts from the Pasadena-based institution. For more details, visit Freddie Mac.

3/30/01: HUD Temporarily Suspends Teacher/Officer Next Door Programs

This week HUD issued a notice indicating that it is temporarily halting sales of discontinued homes to officers and teachers under its Officer Next Door and Teacher Next Door programs. This action is being taken due to the recent uncovering of numerous instances of fraud by some homebuyers. HUD is imposing an immediate 120-day suspension of home sales under these programs beginning April 1 and lasting through July 31. HUD will honor all sales contracts it has signed on properties offered for sale prior to April 1. The program reportedly will resume August 1, 2001.

3/19/01: NAR President-Elect Martin Edwards Urges Congress to Increase FHA Multifamily Loan Limits

In an effort to address the growing affordable housing crisis, last week President-Elect Martin Edwards joined with other housing industry representatives and called on Congress to increase the FHA multifamily loan limits as a first-step to increasing the production of federally insured affordable rental housing. Appearing before a press conference to announce the formation of a new coalition organized to address the nation's affordable housing crisis, Edwards proclaimed that FHA's outdated multifamily loan limits, coupled with rising costs, have contributed to the dearth of affordable rental units. The coalition, comprised of NAR, the Mortgage Bankers Association, National Association of Home Builders, National Leased Housing Association, the National Multi Housing Councl, U.S. Conference of Mayors, National Apartment Association, and AFL-CIO Housing Investment Trust, is urging Congress to increase by 25 percent the base amount FHA can insure for multifamily housing, with additional allowances for high-cost areas of the country.

2/22/01: CHFA Announces Availability of Energy Efficient Mortgages

The California Housing Finance Agency (CHFA) last week announced the increased availability of mortgage loans that could be used to help first-time low- and moderate-income homebuyers lower monthly utility bills. The move was in response to the acute energy shortage currently being experienced throughout the state.

While there are a number of home improvements that could have a significant impact on the amount of electricity used in a home, many low- and moderate-income first-time homebuyers are unaware of the low-cost resources available that would allow them to make these types of improvements at the same time they actually purchase their homes, CHFA said.

The CHFA/FHA Energy Efficient Mortgage Program (EEM) helps homebuyers save money on utility bills by enabling them to finance the cost of adding energy-efficiency features to their home as part of their FHA-insured home mortgage. Homebuyers interested in obtaining a CHFA/FHA EEM loan should contact an approved CHFA lender.

1/1/2001: FHA Increases Loan Limits

In keeping with increases in loan limits announced by Freddie Mac, the Federal Housing Administration announced that effective January 1, 2001, it has increased loan limits to $239,250 in 19 high-cost areas and $132,000 elsewhere. The limits are up 8.83 percent over levels in 2000, when the caps were $219,849 and $121,296, respectively.

The FHA also increased the cap for multi-unit structures: $168,936 for two-unit buildings, $204,192 for three-unit buildings and $253,776 for four-unit buildings. In high-cost areas, the limits are $306,196 for two-unit buildings, $370,098 for three-unit buildings, and $459,969 for four-unit buildings. Visit HUD for more details.

Excerpt from California Association of Realtors (CAR) website

 HUD
 Freddie Mac
 Fannie Mae

Initating the Mortgage Process
Selecting the Right Mortgage
All About Insurance
Refinancing your Mortgage
Homebuyer Assistance Programs