Homeownership Preservation Education (HOPE) Act

Jun 6, 2012 Issues: Housing

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. 

The Issue

With interest rates and home prices both at historic lows, it is expected that there will be an increase in younger households and first-time home buyers in the next few years. For first-time homebuyers, counseling can make the difference between successful homeownership and foreclosure. Studies show that new homeowners desperately need coaching, but are not always getting it. 

The Solution

Homeowners who have participated in housing counseling are more likely to stay current on their mortgage, which means increasing access to pre-purchase counseling is an effective way to help get our nation out of its current housing crisis and to prevent anything like this from ever happening again. Pre-purchase housing counseling is an investment in helping households prevent defaults and foreclosures and produce mortgage ready homebuyers.  

Bill Summary

The HOPE Act would provide a 0.25 percent reduction on the FHA upfront mortgage insurance premium for first-time homebuyers who complete a HUD-approved housing counseling program. For example, on a $200,000 FHA loan, the incentive would equal $500 less on the upfront mortgage insurance premium collected at closing or paid through the life of the loan. 

Status

The bill was introduced in the 112th Congress and referred to the Subcommittee on Insurance, Housing and Community Opportunity. Housing Subcommittee Senior Democrat Rep. Luis Gutierrez (D-IL) and Rep. Bob Dold (R-IL) are both original cosponsors.  

Supporters

  • National Association of Realtors
  • Catholic Charities USA
  • ClearPoint Financial Solutions
  • HomeFree-USA
  • Homeownership Preservation Foundation (HPF)
  • Housing Action Illinois
  • Housing Partnership Network (HPN)
  • Mission of Peace National Corporation
  • National Coalition for Asian Pacific American Community Development (CAPACD)
  • National Community Reinvestment Coalition (NCRC)
  • National Council of La Raza (NCLR)
  • National Federation of Community Development Credit Unions (CDCU)
  • National Federation for Credit Counseling (NFCC)
  • National NeighborWorks Association (NNA)
  • NID Housing Counseling Agency (NID-HCA)
  • Rural Community Assistance Corporation (RCAC)
  • Seedco