When considering how the housing market works, we usually think of buyers, sellers, and lenders. But behind the scenes, there is another important player that helps keep everything running smoothly and money flowing to local lenders: the Federal Home Loan Banks (FHLBs). These 11 regional banks provide a critical source of funding for their member financial institutions, including banks, credit unions, and insurance companies.
Last month, the U.S. Department of Housing and Urban Development (HUD) announced long-awaited updates to the Federal Housing Administration’s (FHA) 203(k) Rehabilitation Mortgage Insurance Program. As an industry stakeholder, NAHREP has advocated for updates to this program, including raising repair limits and making the program more accessible in today’s housing market. Now that these updates have been released, we are excited to dive into the program details, including the key changes and what you need to know if you want to get more involved in expanding access to the program.
Last month, the Federal Housing Finance Agency (FHFA) made two big announcements that will benefit millions of borrowers, resulting in cost savings for nearly 1 in 5 borrowers of the Enterprises’ recent mortgage acquisitions. On October 24, 2022, FHFA announced it will reduce upfront fees for certain first-time homebuyers, low-income borrowers, and underserved communities. Separately, FHFA announced its plan to update its credit scoring model, which will consider alternative payment data, such as rent and utilities. NAHREP applauds the FHFA’s decision to reduce costs and expand access to credit for many creditworthy borrowers.
Last month, NAHREP joined the National Housing Resource Center and other housing advocates signed a letter asking HUD to lower the FHA Mortgage Insurance Premium by 25 to 35 basis points and end the life of loan requirement on the FHA Mortgage Insurance Premiums. These changes would make FHA-insured mortgages more affordable for homebuyers at the point of sale and reduce monthly payments in the long term. As the U.S. is currently facing rising interest rates and record low housing affordability, now is a critical time to act on these initiatives.
In some good news, late last month, the Federal Housing Administration (FHA) announced that it will allow first-time homebuyers to use positive rental payment history in their credit assessment to see if they are eligible for an FHA mortgage product. Positive rental payment history includes rental payments made on-time during the last twelve months. Adding this rental payment history criteria would allow first-time homebuyers who lack or have a lower credit score greater access to homeownership.
Last week, NAC Regional Director Imelda Manzo and I presented on the State of Hispanic Homeownership in San Diego for the San Diego Union Tribune. Following our presentation, one of the attendees asked us if there were any programs that were particularly targeted for the Latino community. This made me think about Special Purpose Credit Programs (SPCP) and the fact that we haven’t talked about them enough here on the blog.
As you know, NAHREP, a 22-year-old organization, has a clear mission to advance sustainable Hispanic homeownership. NAHREP’s Policy Department, a wing of the organization that I started 4 years ago, is still a kid in comparison to the broader organization. But, like the organization, it is important that the department also has a clear mission statement. I would say that the NAHREP Policy Department’s mission is to advance sustainable Hispanic homeownership through advocacy, thought leadership, stakeholder relationships, research, and education.
This week the NAHREP familia took Congress by storm, meeting with a total of 53 U.S. Representatives and U.S. Senators, 20 of which are member meetings. That means an actual Member of Congress joined almost half of our meetings! This is probably the most member meetings we’ve had since I joined NAHREP. This is a testament, I believe, to the work we’ve been doing at the National Advocacy Committee to increase our footprint and relationships in Congress. Your voices matter. I’ve said this before, and I’ll say it again, we can complain all day long or we can use our voices and experiences to put pressure on the individuals who can actually do something about the problem.
Latinos are twice as likely to purchase a home using Federal Housing Administration (FHA) loans compared to non-Hispanic White households. However, Latino households using FHA loans faced the steepest hurdles in getting their offers accepted last year. If you read the 2021 State of Hispanic Homeownership Report, you know that Latinos were 81 percent more likely to get denied for conventional home purchase loans than non-Latinos, so for many first-time homebuyers, FHA loans were the only option.
Happy Hispanic Heritage Month! Well, at NAHREP, every month is Hispanic Heritage Month. T-minus 13 days until NAHREP at L’ATTITUDE! For those of you who have attended the NAHREP at L’ATTITUDE conference in San Diego before but have never left downtown, please make it a point to go to our beaches! They are truly some of the greatest gems we have in the country and given everything we have all been through these past two years, lost loved ones, life turned upside down, we all need some TLC.