June 2022 marks the 20th anniversary of National Homeownership Month. In alignment with the Biden-Harris Administration’s commitment to increasing homeownership, the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) will hold a series of events throughout the month, the organizations have announced. These events will amplify HUD’s efforts to support potential homeowners, increase housing supply and affordability, and ensure sustainability for existing homeowners, a release stated.
“Each June, we mark National Homeownership Month, a time for HUD and FHA to renew our commitment to supporting individuals and families in achieving and sustaining homeownership,” said HUD Secretary Marcia L. Fudge. “Homeownership is a key source of wealth building and is often the foundation for one’s life. Unfortunately, the lack of affordable housing supply has placed homeownership out of reach for many people with low and moderate incomes, first-time homebuyers, and communities that have been historically and systemically locked out of homeownership. The Biden-Harris Administration has put forth the most comprehensive effort to close the housing supply shortfall in history, and we will continue to take action to address the barriers families are facing in today’s housing market.”
“The Federal Housing Administration and HUD’s Office of Housing are an important part of the nation’s housing system,” said Federal Housing Commissioner Julia Gordon. “And while we are proud that we serve more than 700,000 first-time homebuyers on average each year, we remain committed to enhancing and improving our programs to promote expanded access and equity in homeownership, particularly for underserved communities.”
HUD’s Office of Housing and the Federal Housing Administration play a vital role for the nation’s homebuyers, homeowners, renters and communities through their nationally administered programs, the release read. Under the leadership of Secretary Fudge and Commissioner Gordon, HUD continues to prioritize FHA’s mission through:
- Taking action to increase housing supply and access to affordable housing. In May, the Biden-Harris Administration announced an Action Plan to Ease the Burden of Housing Costs, designed to close the housing supply gap within the next five years. HUD is also making more single-family homes available to individuals, families and non-profit organizations by prioritizing homeownership and sale to non-profits when disposing of HUD-held assets.
- Launched a whole-of-government plan for wide-ranging reforms to advance equity in home appraisals. In March, HUD delivered the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) Action Plan to President Biden. The PAVE Action Plan aims to dismantle racial bias in the home lending and appraisal process while promoting generational wealth creation through homeownership. The PAVE Task Force, co-chaired by Secretary Fudge and White House Domestic Policy Advisor Susan Rice, is the first-of-its-kind interagency initiative to address racial bias in home appraisals.
- Serving more first-time homebuyers and communities of color. In November, FHA announced a historically strong Mutual Mortgage Insurance Fund report showing that the percentage of first-time homebuyers using FHA insurance reached a new high. The share of FHA-insured mortgages made to minority borrowers reached almost 42%. According to 2020 HMDA data, FHA served double the percentage of Black and Hispanic borrowers compared to the rest of the mortgage market.
- Preventing foreclosures for borrowers affected by the COVID-19 pandemic. HUD and FHA continue to assist borrowers who missed mortgage payments because of COVID-19. In April, FHA added a new 40-year mortgage modification option for mortgage servicers to use in conjunction with its partial claim option to assist additional borrowers who are behind on their mortgage payments. As a result, FHA’s delinquency rate has significantly decreased from a high of 11.9%, or 942,000 mortgages, at the end of November 2020 to 5.23%, or 380,000 mortgages, as of April 2022. Since January 2021 alone, more than one million borrowers have exited forbearance. From January 2021 through April 2022, FHA servicers have completed almost 1.3 million COVID-19 home retention actions through loss mitigation options.
- Removing barriers to homeownership for those with student loan debt. Last summer, FHA updated its policy on student loan monthly payment calculations. This removed barriers to affordable single-family FHA-insured mortgage financing for creditworthy individuals with student loan debt, which has a disproportionate impact on communities of color. The new policy bases the monthly payment on the actual student loan payment a borrower pays, rather than a percentage of the balance, more closely aligning FHA policies with industry standards.
- Affirmed the use of special purpose credit programs. A Special Purpose Credit Program (SPCP) is a tool that allows lenders to meet the specific needs of historically disadvantaged groups. In December, HUD made clear that the use of certain SPCPs to help address inequities in barriers to credit and homeownership is lawful under the Fair Housing Act. On January 26, Secretary Fudge convened a virtual meeting with the Consumer Financial Protection Bureau, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Reserve, Federal Housing Finance Agency (FHFA) and National Credit Union Association to discuss the roles of HUD and partner agencies in expanding homeownership opportunities for those who have been and continue to be systematically excluded from the housing and credit markets. The group discussed future steps to encourage use of SPCPs as a means of addressing persistent disparities in access to homeownership.
- Setting the stage for increased fair housing and lending enforcement and access. Last summer, HUD entered into a first-of-its-kind memorandum of understanding (MOU) with FHFA, marking a historic collaboration on fair housing and fair lending enforcement and oversight engagement with the FHFA-regulated entities including Fannie Mae, Freddie Mac and the Federal Home Loan Banks. This will ensure deeper collaboration on fair housing investigations and enable data sharing to further fair housing for the mortgage industry.
To learn more, visit www.hud.gov.
