S. 4861: Housing Financial Literacy Act of 2026
This bill would change how certain FHA home loans work for first-time homebuyers who complete an approved financial literacy housing counseling program before applying for the mortgage or signing a sales agreement.
What the bill does
- It would require the Department of Housing and Urban Development (HUD) to give a discount on the FHA mortgage insurance premium for qualifying first-time homebuyers.
- The counseling program would have to be completed before the person signs a mortgage application or a home sales contract.
- The premium discount would be set at 25 basis points lower than the premium amount HUD otherwise establishes. In plain terms, that means the upfront mortgage insurance cost would be reduced by 0.25 percentage points compared with the standard amount.
How it would work in practice
FHA loans are government-insured mortgages used by many homebuyers, especially people with smaller down payments or less established credit. Borrowers often pay a mortgage insurance premium to protect the lender if the loan goes unpaid. This bill would lower that premium for eligible first-time buyers who complete housing counseling in advance.
The goal appears to be to encourage homebuyers to learn about budgeting, mortgage terms, and homeownership responsibilities before taking out an FHA loan.
Who would be affected
- First-time homebuyers using FHA-backed mortgages could pay less in mortgage insurance if they complete the required counseling.
- HUD would have to update its FHA premium rules to reflect the new discount.
- Housing counseling providers could see more demand if more buyers seek the program to qualify for the lower premium.
Relevant Companies
- RDFN — Redfin could be indirectly affected if the lower FHA costs make some first-time home purchases more affordable.
- Z — Zillow could see indirect effects through changes in first-time buyer activity and FHA loan demand.
- COOP — Mr. Cooper Group services mortgage loans and could be indirectly affected if FHA lending volumes change.
- ALLY — Ally Financial offers mortgage-related services and could be indirectly affected by shifts in FHA loan demand.
This is an AI-generated summary of the bill text. There may be mistakes.
Sponsors
2 bill sponsors
Actions
2 actions
| Date | Action |
|---|---|
| Jun. 23, 2026 | Introduced in Senate |
| Jun. 23, 2026 | Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. |
Corporate Lobbying
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