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Fannie Mae Changes Homeowner Education Requirements

Starting in 2022, homeowners with an affordable loan backed by Fannie Mae can fulfill the education requirement using a qualified third-party vendor.

WASHINGTON – Starting in 2022, Fannie Mae will allow third-parties to fulfill the homeownership education requirement on some affordable mortgages.

Third-party homeownership education providers must be aligned with the National Industry Standards for Homeownership Education and Counseling – or with the U.S. Department of Housing and Urban Development (HUD) Housing Counseling Program.

Since 2015, Fannie Mae has required borrowers to complete the course through Framework Homeownership, which started in 2012 as a partnership between Housing Partnership Network and Minnesota Homeownership Center. In 2019, Fannie Mae started waiving the $75 fee for Framework’s course. A program spokesperson said getting a Framework certificate “saves lenders time and hassle at the last minute before closing because it’s more flexible and widely accepted.”

More than 1.2 million homebuyers have used the educational program to qualify for favored mortgage terms.

Fannie Mae currently requires first-time homebuyers that need more than 95% financing to complete a homeownership education course. It’s also a must for first-time homebuyers using Fannie Mae’s flagship affordable finance program, HomeReady, which allows ultra-low down payments, and for first-time home buyers using Fannie Mae’s HFA Preferred program. HFA is administered by housing finance agencies for low to moderate-income borrowers.

Fannie Mae also requires the course for borrowers with no credit score and those using non-traditional credit sources – like rental, utility or childcare payments – to establish a credit history.

The goal of homeownership education – in contrast with loan counseling and other programs to help borrowers keep their housing – prepares prospective borrowers for the complex process of buying a home.

Source: HousingWire (10/06/21) Kromrei, Georgia

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