The House of Representatives passed the Financial Literacy Act of 2019 (H.R. 2162), which provides a quarter point discount on the Mortgage Insurance Premium (MIP) for homebuyers who are applying for an FHA mortgage and have completed a housing counseling program by a HUD approved housing counseling agency. The value of this legislation is that it provides an incentive for homebuyers to engage with housing counselors early in the process and get the benefit of independent information, a thorough review of their finances and credit, guidance on the homebuying process, and access to downpayment assistance.
We worked with the offices of Rep. Beatty, Rep. Stivers, and Chairwoman Waters to support the bill and to include wording that the housing counseling services needed to be completed before a mortgage application has been signed. When a mortgage application is made, the homebuyer is locking in the loan terms and making major financial decisions, before they have the benefit of the housing counseling.
We would also like to have the housing counseling provided before a real estate sales agreement is signed (another major financial decision), but that did not make it into the final bill.
A copy of the legislation is here.
We are looking to the Senate as the next step in the process.