According to a new HUD report, home buyer education and counseling leads to improved mortgage literacy, greater appreciation for communication with lenders, and better underwriting qualifications. The report, The First-Time Homebuyer Education and Counseling Demonstration: Early Insights, is based on a study of 5,800 low, moderate, and middle-income first-time home buyers across 28 metropolitan areas in the country. HUD is conducting the study because previous research on the effectiveness of housing education and counseling has been of limited value because of a lack of resources, small sample size, and nonexperimental design. The study's results indicate that home buyer education and counseling could significantly diminish the risks associated with homeownership and help home buyers make better financial decisions. HUD plans to continue this research until 2020 to discover long-term impacts of home buyer education and counseling and its effect on financial success among different subpopulations and demographic areas.
The U.S. Department of Agriculture's (USDA) Rural Housing Service issued a notice outlining policies and procedures for the Section 542 Rural Development Voucher Program (RDVP) for Fiscal Year (FY) 2016. The RDVP was established in 2006 and does not have regulations so this notice, issued annually, serves to inform the public of program funding and administration.
Section 542 Rural Development Vouchers offer protection to low-income tenants of USDA Rural Development-financed multifamily properties when the property owner prepays the Section 515 Rural Rental Housing loan or if USDA action results in a foreclosure of a 515 property. When prepayment occurs, USDA affordable housing requirements and rental assistance subsidies associated with Section 515 generally cease to exist, leading to possible rent increases for tenants. The Section 542 voucher is therefore intended to supplement eligible tenants' rent payment so they can remain in the property or move to a new property. Tenants should receive notice from USDA within 90 days of when prepayment or foreclosure occurs, informing them of the Section 542 voucher and providing application information.
Americans still want to own homes — if they can afford to. That's the finding of a report released by the Harvard University Joint Center for Housing Studies. The pressures of student debt, rising rents and the leftover wreckage from the nearly decade-old housing bust have restrained people's ability to buy, even though the dream remains alive. The report sees reasons for both optimism (more millennials are poised to leave the nest) and concern (rising numbers of renters face extreme costs). Those factors could determine whether the share of Americans who are renting keeps rising or whether the nation's home ownership rate can rebound from a near 48-year low of 63.5 percent.
Real estate is the industry most critical of the House GOP tax reform plan in the early going. Tax reform involves a big bet: That all the businesses, families and groups that benefit from specific tax breaks would be willing to trade those breaks for lower rates and simpler taxes. House Republicans' tax reform proposal recommends setting a top individual tax rate of 33 percent, and a business tax rate of 20 percent. But the trade-off is that the vast majority of existing deductions, credits and exclusions would be eliminated, leaving so few that, Republicans hope, taxpayers could file taxes on a return no bigger than a postcard.
The former head of the Federal Housing Finance Agency called for a radical rethink of the U.S. housing system that could spell the conversion of the GSEs to lender-owned institutions.
Edward DeMarco, who ran the FHFA for more than four years, co-authored “Why Housing reform Still Matters” for the Milken Institute with Michael Bright, who pitched a failed reform plan in 2014 as a member of Senator Bob Corker’s (R-Tennessee) staff. In it, the authors assert that the changes in the housing market since 2009 have become increasingly complex and burdensome, with Fannie Mae and Freddie Mac at the center, “trapped in a state of legal limbo called conservatorship.” “The government life support given to [the GSEs] at the height of the financial crisis was meant to be temporary, followed by legislation replacing the toxic aspects of their activities and reforming our market structure,” the report states. But a long-term replacement for that “temporary” system has yet to be installed, mostly because of political rancor, and a return to the way it used to be would just set up Congress to have to bail out the GSEs should another financial disaster hit.