FHA will allow expected rental income from an accessory side unit to be considered for an FHA loan, the 203(k) fixer-upper program will be improved, and more.
WASHINGTON – A White House press release announced new initiatives to support homeownership, though with a nod to the market’s current difficulties and a request for Congress to appropriate $16 billion for the Neighborhood Homes Tax Credit, which it says will build or rehabilitate more than 400,000 homes.
New actions to support homeownership
- Accessory dwelling units: The Department of Housing and Urban Development (HUD) says a new Federal Housing Administration (FHA) policy will allow prospective borrowers to use a portion of their expected rental income from an Accessory Dwelling Unit (ADU) to be added to the borrower’s effective income for purposes of qualifying for an FHA-insured mortgages.
- Native American tribes: USDA is awarding $9 million in loans to nine Native American Community Development Institutions as a part of its efforts to increase access to homeownership for Native Americans on Tribal Lands through a relending demonstration program.
- Innovative homeownership models: Before the end of the year, USDA will launch a pilot to test alternative eligibility criteria related to representation for Community Land Trust Organizations through its Section 502 Direct Home Loan Program. Through the pilot, USDA will evaluate whether expanding eligibility criteria increases access to affordable homeownership opportunities.
- Home repairs: HUD, through FHA, is working to update the 203(k) Rehabilitation Mortgage Insurance Program that helps homebuyers roll the cost of a home’s repairs into their first mortgage. Potential policy changes could increase the funds available to make renovations and repairs, and/or extend the time it takes to complete those improvements.
- Homeowners’ right to remain in homes: The Consumer Financial Protection Bureau (CFPB) is working on reforms to help homeowners who are having trouble making their mortgage payments. The reforms, as planned, will help homeowners get the help they need without unnecessary delays or hurdles and hopefully avoid foreclosures.
- Homeowner help for veterans behind on their mortgage: In fiscal year 2024, the United States Department of Veterans Affairs (VA) will offer a new home-retention option. The VA Servicing Purchase (VASP) program will help veteran borrowers who are behind on their mortgage loan but do not qualify for traditional home retention options.
© 2023 Florida Realtors®