FHFA Looks to Expand Access to FHA Loans
New, interim changes to the the Federal Housing Finance Agency's Affordable Housing Program will allow the use of AHP subsidies in conjunction with the Federal Housing Administration's Hope for Homeowners Program; the FHFA announced the proposed rule Wednesday afternoon. Current AHP regulation requires each of the 12 Federal Home Loan Banks to contribute 10 percent of their previous year’s net earnings to assist member institutions engaged in lending for owner-occupied and rental housing to low- and moderate-income households. The rule permits the set-aside funds to be used for two new purposes. First, FHLBanks may use AHP funds to reduce the outstanding principal balance of the refinanced loan below the established maximum 90 percent loan-to-value ratio established in the Hope for Homeowners underwriting criteria; fund may also be used to pay FHA-approved loan closing costs, FHFA said in a press statement. “The use of AHP set-aside funds with the HOPE for Homeowners Program will enhance the effectiveness of each program, ensure that the full range of federal assistance to homeowners is available quickly, and provide the flexibility that the FHL Banks and their members need to make the AHP refinancing program successful,” said Edward DeMarco, FHFA deputy director for housing mission and goals. The proposed rule is open for comment for the next 60 days. Some HW sources said the program is further proof of how government officials intend to use their new-found and wide-reaching powers in mortgage lending markets. Read the full FHFA statement >> Editor’s note: To contact the reporter on this story, email firstname.lastname@example.org.