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CUOMO ANNOUNCES NEW PLAN TO REDUCE COST OF BUYING NEW HOMES
DALLAS - Housing and Urban Development Secretary Andrew Cuomo today announced a new plan that, when coupled with the recent dramatic increases in FHA loan limits and simplification of the FHA down payment process, will further reduce the cost of buying newly constructed homes.
Cuomo made the announcement during an address to the National Association of Home Builders at the annual convention in Dallas, Texas. This initiative reflects HUD's ongoing effort to reform FHA (Federal Housing Administration) to better serve American homebuyers.
"Homeownership is the cornerstone of the American economy, our communities and our families, and we are pleased to work with the Home Builders to make homeownership affordable to more Americans," Cuomo said.
The new initiative has two components. First, FHA will reduce the required builder warranty on new homes insured by FHA from 10 years to one year. This will reduce the cost for homebuyers up to $500 and will encourage more builders to participate in the program.
In addition, Cuomo also announced a One Stop Appraisal Process was part of an ongoing overhaul of FHA appraisals. Under the new approach, FHA will require a comprehensive appraisal of a single model home in a subdivision. The appraisal of other homes in the subdivision will build off this baseline appraisal, with adjustments for upgrades and options. These changes will save thousands of dollars on the cost of obtaining subdivision appraisals.
"FHA is committed to working with builders to make sure that our products help them serve their customers better," said Assistant Secretary for Housing and Federal Housing Commissioner William C. Apgar.
FHA loan limits increased up to 30 percent in cities across the country as a result of recent legislation proposed by the Clinton Administration and passed by Congress in October.
"When combined with recent dramatic increases in FHA loan limits, this new initiative will make FHA the premier source of housing finance in the new millennium," Cuomo said.
Content Archived: January 20, 2009