The FHA “HAWK” (Homeowners Armed with Knowledge) program is slated to begin October 1, 2014. The HAWK program will begin as a 4-year pilot program, so it may or may not continue past 2018.
The HAWK program gives qualified first-time homebuyers a reduction on their mortgage insurance premiums (MIP) at closing, and another annual MIP reduction after the 18th month that will last the life of the loan.
Eligibility for the FHA HAWK Program
In addition to meeting regular FHA qualifications, the HAWK program is only available to first-time homebuyers. A first-time homebuyer is considered to be an individual who has not been the owner of a home in the 36 months preceding their loan application.
Participants in the HAWK program must also complete specific education requirements with a HUD-approved housing counseling agency.
Borrowers are responsible for payment of the mandated education courses for HAWK, although education payment assistance is built into the HAWK program.
HAWK education is broken down into 3 elements, each of which must be completed before the next step in the homebuying process can be completed:
- Pre-contract housing counseling and education.
- Pre-closing housing counseling.
- Post-closing housing counseling.
The MIP reductions under the HAWK program could save homebuyers a great deal of money.
Under the HAWK program, qualified homeowners will immediately receive:
- 50 basis points reduction in upfront MIP (mortgage insurance premium) that is paid at closing.
- 10 basis points reduction in annual MIP (mortgage insurance premium) that is typically paid in the monthly mortgage payment.
After 18 months, homeowners under the HAWK program who have not had a 90-day delinquency within the first 18 months, will receive an additional permanent reduction of 15 basis points to the annual MIP starting the 25th month of the loan.
Learn More About the FHA HAWK Program
Learn more about HAWK with FHA’s HAWK Frequently Asked Questions. The FAQs are rather thorough, and will give you a good idea of education costs if you are thinking about buying a home using the HAWK program.
Whether FHA’s HAWK program will be warmly received by homebuyers is yet to be seen, especially with the education requirements imposed upon borrowers. But, there are numerous solutions for buying or refinancing a home, including government and private mortgage programs.
When you are ready to start looking for a home, or when you are thinking about refinancing options for your existing home, please let us show you the options that could work best for you.
Marimark Mortgage is a licensed mortgage broker in Florida, Virginia, and Pennsylvania.