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Today, the White House released a series of announcements aimed at expanding access to homeownership and helping homeowners struggling financially to remain in their homes. Some of the items in the announcement represent immediate changes to federal programs, while others are the administration’s commitments to further examine policies and requests for legislators to enact items the President proposed in his budget submitted to Congress in March of this year.
Specifically, the White House calls on Congress to act on the President’s budget proposals that would create a federal down payment assistance program and build and rehabilitate homes already on the market. The rollout of these policy initiatives also follows up on actions taken throughout the President’s term that expand access to homeownership, including a reduction in the Federal Housing Administration’s (FHA) mortgage insurance premium and the use of positive rental payments in the absence of detailed credit histories, both of which are issues championed by the National Association of REALTORS® (NAR).
The President’s announcement includes several positive policy updates the administration is taking or planning to accomplish in the near future. Specifically, this includes:
- Updates to FHA’s policies on Accessory Dwelling Units (ADUs). Under this change, buyers will be allowed to use actual or potential rental income of an ADU when qualifying for an FHA-insured loan. FHA buyers can now take advantage of this change by purchasing homes with an ADU, add an ADU to their existing property, or build homes with an ADU attached to it. NAR has been a strong supporter in the potential of ADUs to create additional housing inventory and more opportunities for homeowners.
- A commitment to continue working on FHA’s 203(k) Rehabilitation Mortgage Insurance Program. This includes examining the funds available to borrowers using 203(k) loans and time requirements for completion. NAR has advocated on this issue to FHA to create resources for buyers using FHA loans to expand a segment of the housing inventory and rehabilitate the existing housing supply.
- Increased funding to nine Native American Community Development Institutions. The U.S. Department of Agriculture (USDA) is awarding $9 million through a relending demonstration program that provides capital to Native Community Development Financial Institutions to be used for low and very-low-income families on tribal lands.
- Opportunities to assist homeowners remain in their homes. The Consumer Financial Protection Bureau (CFPB) is reforming current rules to help homeowners who are struggling to make payments on their mortgage, as a result of success of these programs seen during the COVID-19 pandemic. Simultaneously, the Department of Veterans Affairs (VA) will create a new home retention program that provides relief to borrowers in need.
- Expanded eligibility for “rep and warrant” relief. The Federal Housing Finance Agency (FHFA) is updating the treatment of single-family mortgages backed by the Government-Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac. Under the new policies, borrowers who elected a COVID-19 forbearance will be treated similarly to loans where borrowers obtained forbearance as a result of a natural disaster. These loans will remain eligible for “rep and warrant” relief based on payment history over the first 36 months following the origination of the loan.
NAR appreciates the administration’s continued efforts to address homeownership access and increase the housing supply. We will continue to work with the administration and respective federal agencies to ensure that responsible homeownership and the housing inventory remain a top priority.