Sponsors (2)
The bill trades a standardized, earlier counseling requirement and a guaranteed 25-basis-point mortgage insurance discount that can improve borrower readiness and lower costs for many, against the risk that a flat discount reduces benefits for buyers of larger loans, may delay purchases where counseling access is limited, and creates modest administrative burdens for HUD/FHA.
Homebuyers who complete required counseling before signing an application will receive a guaranteed 25-basis-point (0.25%) reduction in mortgage insurance premium, directly lowering borrowing costs for many borrowers.
Homebuyers (especially first-time and low-income borrowers) will get counseling earlier in the process, which can improve borrower readiness, reduce default risk, and promote better long-term loan outcomes.
Borrowers with large loans (e.g., middle-class families taking higher principal loans) may receive a smaller benefit because the bill replaces a percentage-of-principal cap with a flat 25-basis-point reduction, potentially increasing mortgage insurance costs for those buyers.
Requiring counseling before signing an application could delay home purchases or add an upfront burden where counseling access is limited, disproportionately affecting time-sensitive buyers and those in areas with few counseling providers.
Narrower eligibility timing and an altered discount formula will require HUD/FHA to issue new guidance and adjust administration, imposing implementation costs and operational complexity on the agency.
Based on analysis of 2 sections of legislative text.
Requires counseling before signing FHA mortgage or sales agreements and replaces the premium discount cap with a 25-basis-point reduction below the Secretary's established premium.
Official title: Require the Secretary of Housing and Urban Development to discount FHA single-family mortgage insurance premium payments for first-time homebuyers who complete a financial literacy housing counseling program.
Introduced June 23, 2026 by Gary C. Peters · Last progress June 23, 2026
Requires completion of a specified financial literacy or housing counseling program before a borrower signs an FHA mortgage application or a sales agreement, and changes how the FHA premium discount is calculated so the discount equals a 25-basis-point reduction below the Secretary’s established premium rate instead of a fixed cap tied to the original principal. The bill narrows the timing for when counseling must be completed (before signing application or sales contract) and replaces a percent-of-principal cap on the premium discount with a relative basis-point reduction, altering the way borrowers benefit from completing counseling.