In its latest commentary, Jonathon Lawless, VP of Product Development and Affordable Housing for Fannie Mae, says it is vital that borrowers, especially first-time homebuyers, are “better equipped to make well-informed decisions.” [1]
“We can all agree: The homebuying process is complicated. Finding the right home—even deciding whether to buy a home at all—can be difficult, and many people struggle to understand all the different options they may have,” Lawless said.
Lawless said that Fannie Mae is “highly committed” to making homeownership education an invaluable part of the homebuying process.
Fannie Mae is enacting several changes to the homeownership education space. The GSE will be waiving the $75 homeownership education course fee beginning October 23.
“This will remove the cost burden and potential cost hurdle for borrowers,” Lawless said.
Fannie Mae also said it will be expanding the homeownership education requirement applying to borrowers with loan-to-value ratios of more than 95%.
“This provision will specifically be applicable when all occupying borrowers are first-time homebuyers, thus helping to ensure that new homebuyers are well prepared for sustainable homeownership,” Lawless said.
Framework will be unveiled in 2020 for a new mobile-and-web-based app that will offer streamlined and more personalized content for borrowers, as well as features for lenders that looks to improve homeownership education. Lawless adds that the app will not only be delivering more education, but also tools for consumers to use when shopping for a mortgage.
“These three initiatives will expand the benefits of homeownership education to an even larger audience,” Lawless said. “They will not only help to ensure that borrowers are ready to purchase a home, but that they're also prepared for the responsibilities of homeownership.”
Fannie Mae released a survey earlier this year that found many borrowers overestimate the qualifications [1] and what it takes to own a home.
“Despite increased exposure to credit scores and online resources, consumer understanding about what it takes to qualify for a mortgage has not improved since our original study in 2015, potentially discouraging willing and qualified Americans from taking steps toward homeownership,” the GSE’s report, authored by Mark Palim and Sarah Shadad of Economic and Strategic Research, stated.
Fannie Mae said that a 2018 study, which included an online survey of more than 3,000 respondents, found that more consumers reported seeing their credit scores, but close to half cannot recall what it is.