It’s a dramatic new year for housing. With a market sharply transitioning from refinances to purchases and new mortgage regulations in place, homebuyers and professionals must consider new factors and financing options during the home buying process.
Consider the following:
- FHA—once the go-to source for first-time homebuyers—now have higher costs.
- The Mortgage Bankers Association warns of a potential new “shadow industry” as a result of the new Qualified Mortgage (QM) rule that may cause some low-income borrowers to take out loans with higher rates.
- First-time homebuyers, important for a healthy market, have diminished from 40% to just 28% of buyers. Saving for the down payment continues to be the number one obstacle to homeownership.
In this new QM-driven market, Housing Finance Agencies (HFAs) are stepping in to serve an important role. HFAs will be increasingly relevant because the Consumer Financial Protection Bureau exempted them from the new regulations and they also offer down payment and homebuyer assistance programs.
From a recent Bloomberg article on the importance of HFAs, Lawrence Yun, Chief Economist of the National Association of Realtors said, “First-time buyers have not been participating in the market recovery. Housing-finance agencies could provide a channel for these buyers.”
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