We support HUD’s ongoing commitment to sustainable homeownership. As HUD notes, this mission is consistent with HUD’s core obligation of protecting the Mortgage Mutual Insurance Fund. Importantly, it also aligns with HUD’s statutory duty of “meet[ing] the housing needs of the borrowers that the single family mortgage insurance program under this subchapter is designed to serve.” 12 U.S.C. § 1708(a)(7)(B). Both of these fundamental goals must be at the center of all of HUD’s work with the FHA-insured mortgage program, including HUD’s examination of lending standards. In response to the Department’s effort to better understand how emerging financial products—such as BNPL loans—may affect FHA underwriting and a borrower’s capacity to sustain long-term homeownership, we urge you to collect further data and monitor market developments before making any decisions about the role of BNPL in FHA underwriting. Any action now on incorporating BNPL into FHA underwriting would be premature.
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