The Federal Housing Finance Agency (FHFA) has sent to the Federal Register an interim final rule amending its Affordable Housing Program (AHP) regulation. The changes to the AHP regulation will help preserve homeownership for low- and moderate-income families by allowing the use of AHP subsidy in conjunction with the Federal Housing Administration's (FHA) HOPE for Homeowners Program.
The FHFA's AHP regulation requires each of the 12 Federal Home Loan Banks (FHLBanks) to contribute 10% of its previous year's net earnings to assist member institutions engaged in lending for owner-occupied and rental housing that is affordable for low- and moderate-income households. The interim final rule amends the AHP regulation to allow the FHLBanks to establish temporary mortgage refinancing programs under an existing set-aside authority within the AHP.
The rule permits the set-aside funds to be used for two new purposes: They may be used to reduce the outstanding principal balance of the refinanced loan below the maximum 90% loan-to-value ratio established by the HOPE for Homeowners Program to make monthly payments affordable for the household, and they may be used to pay FHA-approved loan closing costs.
"The use of AHP set-aside funds with the HOPE for Homeowners Program will enhance the effectiveness of each program, ensure that the full range of federal assistance to homeowners is available quickly, and provide the flexibility that the FHLBanks and their members need to make the AHP refinancing program successful," says FHFA Deputy Director for Housing Mission and Goals Edward DeMarco.
The FHFA will accept comments on the interim rule for 60 days after publication. Those comments will be considered in promulgating a final rule.
SOURCE: Office of Federal Housing Enterprise Oversight