Ensure Sound Mortgage Financing

Every program should ensure that private mortgage financing is safe, appropriate and consistent with the goals of the program.  In addition to helping buyers make informed decisions, the program should protect the public interest by preventing predatory loan products and avoiding foreclosures whenever possible.

  • Homebuyer Education: Buyers who benefit from public investment should be required to participate in certified homebuyer education programs.
  • Approved Products: Because public investment is generally at risk in the event of foreclosure, programs have a responsibility to prevent buyers from using high risk loan products. Each program should adopt a clear policy regarding allowable mortgage products (for both purchase and refinancing loans) that allows owners flexibility to obtain competitive financing while protecting the public interest.  Approved lenders should be required to notify the program in the event of a homeowner loan default.
  • Informed Lenders: Each program should take steps to ensure that mortgage lenders financing assisted buyers understand program requirements and should maintain ongoing relationships with supportive lenders.
  • Financeable: Programs should be designed with input from mortgage lenders to ensure that affordability requirements do not unnecessarily interfere with a lender’s security interest in the home or impair a homeowner’s ability to obtain appropriate financing.

Next Section: Understandable