New FHA HAWK Program To Help New Homebuyers October 1st

The FHA is piloting its Homeowners Armed With Knowledge (HAWK) program beginning Oct. 1,

in which first-time borrowers who participate in housing counseling approved by the Department of Housing and Urban Development before they make an offer on a home, as well as before and after settlement, can get a reduction in their mortgage insurance premiums.

First-time home buyers who participate in the four-year pilot program will benefit at closing from a 50 basis points reduction in the upfront mortgage insurance premium and a 10 basis points reduction in the annual premium.  If buyers complete post-closing housing counseling and do not have delinquencies greater than 90 days in the first 18 months after closing, they will receive an additional 15 basis points reduction on the annual premium starting the loan’s 25th month which lasts the life of their loan. .

The FHA loan is popular among today's U.S. home buyers.

Along with ultra-low FHA mortgage rates which rival those from Fannie Mae and Freddie Mac, FHA loans are attractive because they offer a minimum down payment requirement of just 3.5 percent -- the lowest of all widely-available loan programs.

And now, a new Federal Housing Administration program -- the Homeowners Armed with Knowledge program -- is expected to add to the program's allure.

ABOUT THE FHA AND HOMEOWNERSHIP

The Federal Housing Administration (FHA) is the world's largest mortgage insurer. It was first formed 80 years ago as an act of Congress; part of the National Housing Act of 1934.

In 1934, it was difficult for home buyers to borrow money from a bank. Because the economy was still reeling from the Great Depression, banks typically enforced home downpayments of fifty percent or more on loans; and required complete loan repayment in 5 years or fewer.

Terms like these precluded homeownership for many would be buyers and, not surprisingly, more than 60% of Americans were renters.

Then came the FHA and its flagship mortgage insurance program, which has helped make homeownership possible for more than 34 million Americans since its inception.

The premise of the FHA's mortgage insurance program was simple. Much like an auto insurer insured policyholders against loss from damage or accident, the FHA agreed to insure lenders against loss from lack of payment (which is known as "default" in mortgage terminology).

To get its insurance, the FHA published standard eligibility requirements which all loans were required to meet. Today, those requirements include a minimum credit score reading of 580; proof of citizenship or legal residency; and a 3.5% downpayment.

The FHA program was revolutionary for the U.S. housing market. Neighborhoods stabilized as loan defaults dropped and homeownership rates crossed 60 percent by the early 1960s.

Today, FHA loans account for approximately 1 out of every 5 new loans.

2014 FHA MORTGAGE INSURANCE PREMIUMS

When an FHA loan goes bad, the agency repays lenders from its Mutual Mortgage Insurance (MMI) fund. The Mutual Mortgage Insurance fund is the account into which FHA mortgage insurance premiums (MIP) are paid each month.

By law, the account is required to maintain a balance equal to 2% of the FHA's outstanding insured loans and for the agency's first 60-plus years, it met this requirement ably.

A rash of defaults between 2009-2012, though, dropped the FHA's insurance reserves into negative territory.

To recoup lost money -- and to meets its federally-mandated 2% reserve requirement -- the FHA was forced to raise its mortgage insurance premiums five times in 5 years.

Today, the FHA charges mortgage insurance in two parts.

The first MIP is charged at closing and it's called the FHA Upfront Mortgage Insurance Premium, which some lenders abbreviate as UFMIP. The second MIP is charged on-going as part of your monthly mortgage payment.

This payment is called the Annual Mortgage Insurance Premium.

FHA MIP varies based on your downpayment and the length of your loan. All FHA purchase loans are subject to an upfront MIP payment of 1.75%, or $1,750 for every $100,000 borrowed.

For annual MIP, the 2014 FHA MIP schedule is as follows:

• 30-year loans with a downpayment of 5% or more: 1.30% annually
• 30-year loans with a downpayment of less than 5%: 1.35% annually
• 15-year loans with a downpayment of 10% or more: 0.45% annually
• 15-year loans with a downpayment of less than 10%: 0.70% annually

Annual MIP is spilt into 12 parts. The percentage is based on the year's starting balance such that a homeowner with a $100,000 30-year FHA mortgage and making the minimum 3.5% downpayment will pay $108.33 monthly, or $1,300 per year.

Photos: The most expensive home in America?

In the Tampa Bay area, a 60,000-square-foot mansion in Hillsboro

Beach has hit the market after seven years of construction.

"Le Palais Royal" was modeled after palaces in Europe, and it certainly has a royal price tag. With an asking price of $139-million, it may be the most expensive home on the market in the entire country.

The annual property tax bill alone -- estimated at $143,000 -- is more than the cost of many homes.

What does a cool $139-million buy these days? Here are some of the highlights, according to the official Coldwell Banker MLS listing:

• 11 bedrooms
• 17 bathrooms
• The first-ever private IMAX theater
• A 30-car underground garage
• A grand staircase valued at $2-million
• Six waterfalls
• 4,500-square-foot infinity pool
• Air-conditioned dog kennel
• Putting green

The property straddles four acres on the southern end of the small island, meaning the home has both beachfront access and, as the listing suggests, space on the Intracoastal "to dock a mega yacht."

The home has been gathering international attention since hitting the market.

WHAT YOU NEED TO DO TO YOUR HOUSE BEFORE FALL

As summer fades out and the first hints of fall arrive, thoughts start to turn to boots and sweaters and parkas and snowball fights. But before we start changing out our wardrobe and preparing for snowfall, there are a few things we should do to our home.

Air leaks throughout house

Air leaks are one of the primary sources for energy loss in a home, and energy loss means money loss. There are steps you can take to check for and eliminate them. "When checking your home windows and doors for air leaks, start with a detailed visual inspection from both the interior and exterior of your home," said Lifehacker. "On the outside you should look for areas where the old caulking has failed, revealing the gap between the window or door frame and your home's siding."

They also recommend "inspecting the threshold under each door, looking for daylight or other obvious signs of an opening that is too big and needs to be sealed shut, making sure that the weather stripping around the windows and doors is in good condition, and checking old single-paned windows for damaged glazing, which can make the home "vulnerable to expensive heat loss."

Once you've discovered the air leaks in your home, you can set about sealing them up. "More often than not, a fresh layer of exterior-grade caulking will adequately seal shut any gap or crack that is causing you problems. New weatherstripping or an adjustable threshold can help to seal shut the gaps around your home's doors."

Roof check

Summer storms caused problems in areas throughout the country, and in many cities, no roof was spared. If you have yet to have yours checked out, you may want to do so before winter comes and brings snow with it. A call to your insurance company should produce a free visit to come check its condition.

Filters

If it's been awhile, you'll want to do a check of your filters throughout the house to make sure they are clean so air can flow through them smoothly. "According to Energystar.gov, the filters on your home system likely need to be changed either once a month or once every three months, depending on the type you're using," said Allstate. "You should check the product information on the filters for the manufacturer's suggested frequency of change. Depending on where you live, the time of year, and how much you're using your AC or furnace, you may end up having to change your air filter more frequently. For instance, during a steamy summer when you're running your system constantly, you may end up having to change the filter more often than if the weather is nice and you're relying on open windows."

Smoke detectors

It's also time to change out the batteries in your smoke detectors. While you're at it, check and clean out your dryer vent at the same time, clearing any buildup of lint since this can cause a fire.

Fireplace

Now to the place where you actually want a fire in the winter. To keep it safe, you'll want to inspect this area as well. Woodburning fireplaces need to be cleaned because of the potential for buildup of soot and creosote. Gas fireplaces should also be checked for debris and to make sure the chimney structure is secure with no cracks or crumbling mortar joints.

Once you've checked off this list, your home should be in good shape to get you through another fall and winter.