7% rates, and now homebuyer counseling is on the chopping block

Statewide Texas down payment and closing cost assistance

        September 30, 2026

7% rates, and now homebuyer counseling is on the chopping block

This week, the 30-year fixed topped 7%, the White House moved to cancel $56.1 million in federal housing counseling funds, and one Federal Home Loan Bank (FHLBank) assistance pool shows nothing left while another closes today.
In this issue: The rate picture · Assistance programs · Program spotlight · Capital and policy · Dates to watch

Affordable lending goals not turning into results? TangentBridge helps lenders, banks, credit unions, CDFIs and housing agencies fix that. Book 30 minutes
The rate picture
The 30-year fixed tops 7% after the Fed's increase
Freddie Mac's average hit 7.03% on September 24, a week after the Federal Reserve raised its target range a quarter point, to 3.75% to 4%. The 10-year Treasury rose from 5.01% on September 18 to 5.18% on September 24, per the Federal Reserve's September 25 release. Freddie Mac · Federal Reserve statement · Federal Reserve H.15

Adjustable-rate mortgages reach 9.8% of applications
Adjustable-rate mortgages (ARMs) rose to 9.8% of applications for the week ending September 18. The Mortgage Bankers Association tied it to 5/1 ARM rates running more than a point below fixed. Mortgage Bankers Association
Why it matters. Stretched buyers use ARMs to fit a payment under debt-to-income limits. Programs like this week's spotlight require a 30-year fixed first mortgage, which protects assisted buyers from a payment that can reset higher.
Assistance programs
FHLBank Dallas shows no assistance available
FHLBank Dallas shows $0 left as of September 15 in its $17 million 2026 Homebuyer Equity Leverage Partnership, which releases funds in offerings through December 31. It paid up to $25,000 per buyer in Texas and New Mexico and $20,000 elsewhere, for buyers at or below 80% of area median income. FHLBank Dallas
Why it matters. Member lenders with buyers counting on these funds need another source unless the Bank releases more.

FHLBank Topeka set-aside closes today
Reservations for FHLBank Topeka's 2026 Homeownership Set-Aside Program stop today, September 30. It offers $2,500 to $15,000 per first-time buyer at or below 80% of area median income in Colorado, Kansas, Nebraska and Oklahoma. FHLBank Topeka
Why it matters. Members must fund a 2026 reservation to qualify for a 2027 allocation, so a reservation made today that later funds protects next year's money too.
Program spotlight
Southeast Texas Housing Finance Corporation (SETH) 5 Star Texas Advantage
Statewide Texas down payment and closing cost assistance
Assistance. A second lien up to 5% of the loan amount. On Federal Housing Administration (FHA), Veterans Affairs (VA) and U.S. Department of Agriculture (USDA) loans, the 3-year forgivable option can reach 5%. On conventional loans the forgivable option tops out at 3%, and the full 5% requires a second deferred for 30 years.
First mortgage. 30-year fixed FHA, VA, USDA or conventional.
Borrower. 640 minimum credit score, program income limits and homebuyer education for purchases. No first-time buyer rule and no maximum sales price.
Where. Statewide, except Travis County and the cities of El Paso, Grand Prairie and McKinney.
Lender access. U.S. Bank approval plus a SETH lender agreement. eHousingPlus handles onboarding and reservations.
Why it matters, lender lens. With no first-time buyer rule and no price cap, this is a volume program across most of Texas. On conventional loans, the full 5% means the 30-year deferred second, so set that expectation early. Plan for approval and onboarding before your first file.
Sources: SETH lender guides (eHousingPlus, program administrator) · SETH
Capital and policy
White House moves to cancel $56.1 million in housing counseling funds
On September 25 the White House asked Congress to cancel $56.1 million from HUD's Housing Counseling Assistance account, part of an $810 million "pocket rescission" package. Its justification says the program "has not shown reduced delinquencies for counseled homebuyers." White House letter to Congress · White House statement
Why it matters. Many assistance programs require homebuyer education, and HUD-approved counseling agencies often deliver it. Lenders and agencies should ask their counseling partners now what this would do to capacity and wait times.

FHA property standards are open for comment
FHA posted draft updates to its Minimum Property Requirements, with feedback open through November 6. HUD says the standards "have not been updated in over two decades." HUD FHA INFO messages · Draft on the Drafting Table
Why it matters. These rules decide whether older, lower-priced homes can close with FHA financing. Programs and lenders serving older housing stock have a stake.

New Jersey funds free pre-purchase counseling
Around the table · Housing counselors
Starting in October, the New Jersey Housing and Mortgage Finance Agency will offer free pre-purchase counseling and homebuyer education to first-time buyers. The agency says the state law behind it "is intended to replace and expand upon receding federal resources." National Council of State Housing Agencies (NCSHA)
Why it matters. It lands the same week the White House moved to cancel federal counseling funds. A state backfill like this is the model to watch.
Dates to watch

Sep 30 FHLBank Topeka set-aside reservations close. August inflation data (personal consumption expenditures).
Oct 3‑6 NCSHA annual conference, Detroit
Oct 6 New Markets Tax Credit registration closes ($5 billion round with a new homeownership option)
Oct 27‑28 Federal Reserve rate meeting
Nov 6 FHA property standards comments due
Nov 10 New Markets Tax Credit application due
Dec 11 Federal funding, HUD included, runs out unless Congress acts

Some programs need a redesign. Others need better delivery.
When affordable lending goals aren't turning into results, TangentBridge helps lenders, banks, credit unions, CDFIs and housing agencies fix it, from strategy and product design to operations and capital alignment.
Book 30 minutes to talk through yours

Roger Demas, Principal

Frisco, TX · 214-305-2207
[email protected] · tangentbridge.com

Drawn from cited public sources. Not financial, legal or investment advice.
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