HUD’s Office of Affordable Housing Programs (OAHP) issued Notice CPD 18-09, providing guidance to jurisdictions about the homebuyer program requirements of the Home Investment Partnerships Program (HOME). The Notice describes the requirements that must be met concerning individual homebuyers.
HOME Participating Jurisdictions (PJs) must implement the requirements for all homebuyers receiving HOME assistance or purchasing a home developed with HOME funds. The Notice is intended help PJs develop written policies and procedures for homebuyer projects and programs related to homebuyer underwriting standards, responsible lending standards, and standards for refinancing and subordination of a HOME loan.
The Notice also addresses the requirement that all HOME-assisted homebuyers must receive housing counseling provided by a HUD-approved counselor and housing counseling agency. In addition, it provides guidance on the requirements applicable to PJs that provide HOME homeownership assistance through lenders that also provide the primary mortgage.
The purpose of these requirements is to maximize the likelihood that homebuyers assisted with HOME funds will successfully sustain homeownership. Comprehensive homebuyer policies are intended to protect HOME investments by mitigating many of the risks that result from deficient underwriting and risky mortgage loan features. Adequate standards also provide certain protections for the low income households served and ensure that they receive equitable treatment. Without prudent underwriting, borrowers may not be able to afford the expenses involved in homeownership while still meeting their other financial demands. Expensive and risky mortgage products can hinder a borrower’s ability to repay the mortgage, increasing the risk of default and foreclosure.
Notice CPD 18-09 is at: https://bit.ly/2nFTgJW