Caught in the Crosshairs: Congress Targets FHA Mortgage Program

On December 9, 2014, Congress released their latest budget bill, the House Amendment to the Senate Amendment H.R. 83. Buried deep within this 1500 page bill, there is mention of the Homeowners Armed with Knowledge (HAWK) program, and not in a good way. HAWK is one of the programs that make it easier for first-time buyers to qualify for an FHA mortgage.  The recent bill basically gutted the funding for this program with the following verbiage:

“SEC. 235. None of the funds made available by this Act nor any receipts or amounts collected under any Federal Housing Administration program may be used to implement the Homeowners Armed with Knowledge (HAWK) program.”

Essentially, the HAWK program was designed to further educate first time home-buyers by attending a class and requiring them to make their mortgage payments on-time and in-full for the first few years.  If they meet this standard, their insurance premiums are lowered and can save them thousands of dollars over the life of their FHA loans.

The idea here is not that people save money and the government makes less off its loans. In fact, research shows that people paying on-time and in-full ends up saving more money in the long run for the government.  It results in fewer foreclosures, fewer dollars being spent fighting housing blight and processing the foreclosures themselves, less displaced people and a better all-around state of affairs for people who will still own a home and pay taxes on it.

Peter G. Miller at makes a hilariously sad point in suggesting that perhaps some errant author of the bill mistook the HAWK program for the Global Hawk drone program, because that makes about as much sense as deliberately gutting the HAWK program on purpose.  He goes on to make a number of other salient points with a veritable deluge of brilliant metaphors.

Whether you’re in support of HAWK or not, paying attention to bills coming out of Congress is especially important now if you wish to accurately gauge which way Congress is leaning on housing, and what we can expect in the mortgage sector in the near future.

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