Bills
| 3.23.22

Should First-Time Homebuyers Get an FHA Insurance Discount After Completing HUD-Certified Housing Counseling? (H.R. 2162)

Do you support or oppose this bill?

What is H.R. 2162?

(Updated August 27, 2019)

This bill — the Housing Financial Literacy Act of 2019 — would give first-time homebuyers who complete a Dept. of Housing and Urban Development (HUD)-certified housing counseling course a discount of 0.25% (25 basis points) on their Federal Housing Administration (FHA) mortgage insurance premium.

Argument in favor

American homebuyers’ low financial literacy was a contributor to the 2009 financial crisis and improving homebuyers’ financial literacy is necessary to prevent future mistakes. This bill would offer a financial incentive for homebuyers to go through certified housing counseling.

Argument opposed

Rather than giving FHA mortgage insurance breaks to a relatively small segment of the population, it’d be better and more effective to give all Americans, regardless of homeownership status, government-backed financial literacy education.

Impact

First-home homebuyers; first-time homebuyers’ financial literacy; FHA mortgage insurance premium rates; and HUD.

Cost of H.R. 2162

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Rep. Joyce Beatty (D-OH) reintroduced this bill from the 115th Congress to increase first-time homebuyers’ knowledge: 

“Right now, too many Americans lack the basic knowledge and know-how to fully understand the long-term financial obligations and implications of purchasing a home. Motivating first-time homebuyers to seek vital pre-purchase counseling and equipping them with the much-needed financial skills and tools to make informed financial decisions benefits their families, the surrounding neighborhood, and entire U.S. economy—and that is precisely why the Housing Financial Literacy Act is so desperately needed.” 

After this bill passed the House Financial Services Committee, Rep. Beatty said: 

“Motivating first-time homebuyers to seek vital pre-purchase counseling and equipping them with the much-needed financial skills and tools to make informed financial decisions benefits their families, the surrounding neighborhood, and our entire economy. I am pleased to see my bill move one step closer to becoming law, and many thanks to my Democratic and Republican colleagues for their support.” 

This bill has passed the House Financial Services Committee by a 53-6 vote with the support of two bipartisan cosponsors. Last Congress, this bill had 24 bipartisan cosponsors (23 Democrats and one Republican) and didn’t receive a committee vote.


Of Note: Rep. Beatty’s office notes that homebuyers who receive pre-purchase housing counseling are nearly 33% less likely to fall behind on their mortgages as compared to those who don’t receive pre-purchase housing counseling. Therefore, such homebuyers face a reduced risk of foreclosure.


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / urbazon)