In an effort to create a healthy housing market with successful rates of homeownership, U.S. Rep. Karen Bass (D-Calif.) introduced the Homeownership Preservation Education (HOPE) Act which provides an interest rate deduction on the FHA mortgage insurance premium for first-time homebuyers that complete pre-purchase counseling.
"As we recognize June as Homeownership Month during the month of June, it is critical that we highlight the importance of homeowner education," said Bass. "If a potential homebuyer completes a course in homeownership education prior to purchasing their first home, that person is much more likely to have a favorable experience during the lifetime of their mortgage and most importantly, decrease their chances of ending up in foreclosure. While we are recovering from one of the worst foreclosure crises in generations, we must seek ways to ensure an event of this magnitude never happens again. The HOPE Act equips homeonewers with the necessary tools to make homeownership a success."
If passed, the HOPE Act would provide a .25 percent interest rate deduction on a first-time homebuyers FHA upfront mortgage insurance premium after a HUD-approved housing counseling program is completed. For example, on a $200,000 FHA loan, a homeowner would receive a $500 discount on their upfront mortgage insurance premium, which is collected during the loan closing or paid through the life of the loan.
The original co-sponsors of the bipartisan HOPE Act include Housing Subcommittee Senior Democrat, U.S. Rep. Luis Gutierrez (D-Ill.) and U.S. Rep. Bob Dold (R-Ill.).