Written By: Glenn Michaels
“HAWK”, that stands for Homeowners Armed with Knowledge is a new pilot program that begins October 1, 2014. Borrowers that complete the HAWK program are slated to save on their upfront and annual Mortgage Insurance Premiums (MIP).
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This is going to be a four (4) year pilot program through HUD approved housing counseling agencies and their approved lenders. Borrowers who take the approved courses are going to save .50 on their upfront MIP and .10 monthly on their annual MIP. This savings can amount to a sizable amount over the life of a FHA mortgage.
The borrower must agree, take, and complete three (3) courses besides Housing Counseling. The required education is:
Course #1: Before the home purchase contract is signed;
Course #2: Before the loan closes; and
Course #3: During the first year of homeownership.
Borrowers that go to a HUD approved Housing Counselor that offers the HAWK courses and receives a Certificate of Completion for each course and goes to a participating FHA lender will receive the MIP discounts if they are approved for a FHA mortgage loan.
Borrowers are required to receive a minimum of six (6) hours of housing education and counseling and receive a counseling certificate to satisfy the pre – contract housing counseling and education element. Services can include a combination of individual counseling and education as long as at least 3.5 hours of individual counseling is provided.
The pre – contract individual housing counseling or education may be utilized to cover general topics including but not limited to: understanding the home shopping, home buying, mortgage application process; how to evaluate mortgage products; the role of various real estate professionals, including the real estate agent, lender, title company, appraiser and home inspector; and considerations when selecting from among possible firms or individuals to perform in these capacities; rights and responsibilities of homeowners in comparison to those of renters; how to evaluate neighborhoods and home locations; how housing and transportation costs vary depending on the type and location of the home and the terms of the mortgage loan and contract of sale; federal, state and local resources to assist with homeownership affordability including down payment and cost assistance programs and affordable mortgage products; responsibilities of repair and maintenance; the importance of the home inspection; avoidance of mortgage delinquency and default; the costs associated with homeownership; avoiding fraud and scams; and information on discriminatory housing and mortgage lending practices and the rights and remedies available under federal, state, and local fair lending laws.
There are specific dates of issuance for each certificate that is in time with a borrower’s transaction.
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This is definitely worth the effort for a borrower to get involved with the “HAWK” program. The borrower is more educated and aware of the elements of the entire process of selecting a neighborhood, buying a home, financing a home and the overall knowledge of homeownership. In addition a borrower that buys a $300,000.00 home with 3.5% down payment stands to save $1,447.50 on the upfront MIP. The mortgage with the upfront MIP will be based on $293,118 vs. $294,566 which results in a lower principal and interest payment over the life of the mortgage. The monthly MIP is also .10 less as well thereby making the PITI lower by taking the courses. The borrower over the life of the loan will save thousands in payments for taking a 3.5 hours of courses.
About The Author
Glenn Michaels - As an NAMP® Opinion Editorial Contributor, Glenn Michaels is a mortgage underwriting instructor for Mortgage Underwriter University (www.MortgageUnderwriter.org). As a BBA & FHA DE Underwriter, Glenn is a Pace University graduate who also graduated from New York University’s School of Mortgage Finance. Glenn has conducted numerous training classes and has worked in the mortgage banking industry for 38 years. If you're interested in becoming a writer for NAMP®, please email us at: contact@mortgageprocessor.org.
