September 1, 2015

In Case You Missed It: A Look at Recent National Housing Policy News

Fannie Mae Introduces Revamped Affordable Loan Product
Fannie Mae introduced the HomeReady™ product, a new lending option for low- and moderate-income borrowers. This new initiative will replace Fannie Mae’s MyCommunityMortgage® products, which are currently the firm’s primary offering for low-income consumers.  Fannie Mae’s new HomeReady product reflects several changes to its MyCommunityMortgage offering that are designed to help it better support affordable lending to lower income home buyers.  These include more targeted income limits, increased eligibility, and more flexible underwriting standards.  More information on these changes can be found in a fact sheet on Fannie Mae’s website.

FHA Announces New Initiatives to Promote Green Single-Family Housing
The Federal Housing Administration (FHA) announced two new policies designed to promote energy-efficient single-family housing.  This announcement was part of a broader set of green energy initiatives that the Obama Administration announced the same day.  One of the new policies will allow, under certain conditions, loans for properties with existing Property Assessed Clean Energy (PACE) loans to be eligible for FHA insurance.  Through PACE loans, state and local governments provide homeowners with up to 20-year loans to finance energy efficiency home improvements, secured by tax liens attached to the property.  In the event that the property is sold before the PACE loan is paid in full, the loan may transfer to the next owner of the property.

MBA Housing Demand Study
The Mortgage Bankers Association (MBA) projects between 13.9 and 15.9 million additional households will be formed by 2024, making the next decade one of the strongest in housing in U.S. history, according to a new research paper released today. The report, titled Housing Demand: Demographics and the Numbers Behind the Coming Multi-Million Increase in Households, shows that the housing demand surge will be driven by Hispanics, Baby Boomers, and Millennials.   "Household formation has been depressed in recent years by a long, jobless recovery and by a lull in the growth of the working age population," said Lynn Fisher, MBA's Vice President of Research and Economics.  "Improving employment markets will build on major demographic trends - including maturing of Baby Boomers, Hispanics and Millennials - to create strong growth in both owner and rental housing markets over the next decade."

Moody's: State housing finance agencies will benefit from increasing millennial homeownership rates
State housing finance agencies (HFAs) are set to benefit from increases in home ownership among millennials Moody's Investors Service says in "Millennial Influx in Housing Market Will Benefit HFAs."
Rising wages and declining unemployment are positive factors supporting an expected increase in millennial homeownership, while HFA down payment and closing cost assistance will make their programs attractive to millennials.   "HFAs that capture even a small percentage of the increasing millennial homebuyer market share will see a material impact on loan originations and revenues," author of the report and Moody's Associate Analyst Wesley Coggins says. "According to the US census, 15 million millennial households do not own a home, presenting a sizable untapped market for HFAs."

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