President Obama signed an act this week that included HUD’s new budget and delayed a program that would have saved borrowers hundreds a year.
The U.S. Housing and Urban Development (HUD) Secretary Julián Castro has responded to HUD’s 2015 budget of $45 billion stating that while it does help some of its initiatives, the funding limits the goal of homeownership for some American families.
The new budget was passed under the Consolidated and Further Continuing Appropriations Act, 2015, which was signed by President Barack Obama earlier this week. Castro said while that while bill allows HUD to continue its most of its activities, it fails to include other initiatives aimed at helping some families reach the middle class or pursue their dream of homeownership.
“As the President has said, the legislation is a compromise and no one got everything they wanted,” HUD wrote in a statement. “But, it is a step towards proving that a divided government can work without governing by crisis or threatening an economic recovery that's growing stronger -- which the President believes is a hopeful sign for next year.”
In particular the new budget nixes a Federal Housing Administration (FHA) program called Homeowners Armed with Knowledge. HAWK debuted in May and offered the chance for first-time homebuyers to reduce mortgage insurance premiums. HUD said the pilot program is now delayed for at least a year.
Under the program, homebuyers who committed to housing counseling would have qualified for tangible savings on their FHA-insured loans. The average buyer would have saved approximately $9,800 over the life of their loan, according to HUD.
"Over the last few years FHA has proposed a number of steps to better serve borrowers and lenders in an ongoing effort to expand credit access and ultimately continue moving the economy in a positive direction," said Biniam Gebre, acting FHA commissioner and assistant secretary for housing. "We are disappointed programs that could have served many families will not be permitted under the bill."
Click here to read what the new budget does include and doesn't.
The new budget was passed under the Consolidated and Further Continuing Appropriations Act, 2015, which was signed by President Barack Obama earlier this week. Castro said while that while bill allows HUD to continue its most of its activities, it fails to include other initiatives aimed at helping some families reach the middle class or pursue their dream of homeownership.
“As the President has said, the legislation is a compromise and no one got everything they wanted,” HUD wrote in a statement. “But, it is a step towards proving that a divided government can work without governing by crisis or threatening an economic recovery that's growing stronger -- which the President believes is a hopeful sign for next year.”
In particular the new budget nixes a Federal Housing Administration (FHA) program called Homeowners Armed with Knowledge. HAWK debuted in May and offered the chance for first-time homebuyers to reduce mortgage insurance premiums. HUD said the pilot program is now delayed for at least a year.
Under the program, homebuyers who committed to housing counseling would have qualified for tangible savings on their FHA-insured loans. The average buyer would have saved approximately $9,800 over the life of their loan, according to HUD.
"Over the last few years FHA has proposed a number of steps to better serve borrowers and lenders in an ongoing effort to expand credit access and ultimately continue moving the economy in a positive direction," said Biniam Gebre, acting FHA commissioner and assistant secretary for housing. "We are disappointed programs that could have served many families will not be permitted under the bill."
Click here to read what the new budget does include and doesn't.
