(Washington, D.C.) Readers of the Reporter will recall that ASHI was one of a small number of associations that successfully passed original association-drafted legislation in the last Congress despite the political stalemate.
The president signed into law a bill that included ASHI language to infuse a vigorous chapter on home inspection into the HUD federal housing counseling programs, legislation ASHI refers to as Consumer Protection Home Inspection Counseling legislation.
Now comes the critical implementation phase of the legislation.
It is an unfortunate truth that many professional associations that are successful in passing legislation on Capitol Hill often fail to follow up with agency implementation, or fall short in the process. Quite the opposite, ASHI is committed to working with HUD in a seamless transition from Capitol Hill, in close consultation with the key agency players, making suggestions, refining interpretations of the law, offering technical expertise.
This process already has begun. At a recent meeting at HUD headquarters in Washington, D.C., ASHI approached HUD staff to provide assistance, guidance and support as HUD puts the law into effect.
ASHI is able to capitalize on the good relationship it has cultivated with HUD for several years, converting a negative view of home inspection into a strongly positive appreciation for the professionalism and consumer assistance provided by ASHI home inspectors.
To recap the purpose of the legislation and how ASHI got to this point: The Consumer Protection Home Inspection Counseling provisions require HUD to include counseling on the value/benefits of home inspection as part of its massive housing counseling programs.
In short, the ultimate purpose is to use the great clout and resources of HUD to educate homebuyers about home inspections, and urge buyers to seek home inspections routinely and very early in the homebuying process.
ASHI is branding — successfully — home inspection as a substantial form of consumer protection to both political parties and both Houses of Congress.
Building on that theme, ASHI argued to Congress that, because obtaining a home inspection is a voluntary decision, consumers must have the maximum education and understanding of the benefits of home inspection possible in order to make an intelligent, timely decision.
ASHI made a series of tactical assessments to guide its lobbying efforts:
• The best-funded entity to carry out this mission is not ASHI, but rather, the federal government — with close technical consultation with ASHI.
• There is no more authoritative, independent agency to deliver a pro-home inspection message than HUD.
• The most efficient and economical way for ASHI to encourage HUD to deliver this message is by incorporating a robust, pro-home inspection message in the existing HUD housing counseling programs.
Thus, ASHI drafted the Consumer Protection Home Inspection Counseling legislation, now the law of the land.
HUD implementation and ASHI's role as a key advisor: The relatively small number of associations that manage to pass legislation in Congress often fail to follow through with the federal agencies charged with translating the legislation into action. However, ASHI is fully engaged in this crucial next step — agency implementation.
While HUD has the authority to implement the law, ASHI is in a strong position to provide commentary, assist in drafting message documents and offer other forms of technical assistance to HUD in carrying out its operations.
Based on the good relationship that ASHI has developed with HUD for several years, HUD staff are indeed enthusiastic to hear ASHI's suggestions. HUD has assigned key staff, including legal counsel, to plot the course on implementation.
ASHI expects that the cumulative impact of agency implementation will elevate the prominence of home inspection among all protagonists in the home sales professions, and prompt more focused, more timely and more urgent consideration of home inspection among prospective ASHI clients.
The following are some of the key implementation actions for the new law that ASHI and HUD discussed:
A. Messages, Communications and Public Outreach to Homebuyers
• ASHI is conducting a quick review of HUD's key documents "For Your Protection – Get a Home Inspection" and "Ten Important Questions to Ask Your Home Inspector" to ensure that these materials are current, accurate, as clear and concise as possible. These documents provide a strong pro-home inspection message from the federal government and were drafted in consultation with ASHI.
[EDITOR'S NOTE: Both of HUD's key messages on home inspection were strongly influenced by ASHI's input and its strategic relationship with HUD.
ASHI suggested a complete rewrite of the "For Your Protection, Get a Home Inspection" document – even to details such as the "CAUTION" message and the typeface designed to capture the attention of homebuyers who are otherwise overwhelmed with documents during a home purchase.
The "Ten Important Questions to Ask Your Home Inspector" document was conceived and drafted by ASHI, and adopted by HUD without amendment.
Both documents represent current HUD policy and are available to ASHI member clients on www.HUD.gov.]
• Under the new home inspection counseling law lobbied by ASHI, HUD housing counselors will be required to distribute, discuss and advise homebuyers with regard to the content of these two key messages.
• Of course, these HUD documents have been targeted only to homebuyers seeking FHA financing. Under the new law, HUD will produce a non-FHA version of "For Your Protection…" and "Ten Important Questions…" that will speak to all homebuyers, regardless of the type of financing they seek.
• Per the new law, HUD will translate these documents into Spanish to accommodate this growing sector of the housing market.
• Per the new law, HUD is considering producing the documents in "booklet" form. The booklet form would facilitate providing the documents as handouts (whereas the non-booklet forms will often be downloaded from the HUD website and printed).
• The new law emphasizes communications and methods of distributing the home inspection housing counseling message. HUD is considering a number of Public Service Announcements (PSAs) under outreach provisions in the new investment law, including for the home inspection counseling provision.
• The communications emphasis may include a new HUD hotline to advise homeowners to obtain home inspections. ASHI has offered to provide a script for an automated telephone response (for example: "For information on the advantages of obtaining a home inspection, press or say 4"). The script will provide between 1 and 1.5 minutes of material.
In sum, these communications and aggressive outreach actions are designed to use the vast resources, and clout, of HUD to maximize the penetration of pro-home inspection to all homebuyers across the country.
B. Notify all mortgagees to consider home inspection — very early in the homebuying process
The new law specifically addresses a key point that affects the homebuyers' perceived value of a home inspection: the timing of the inspection. Early consideration can increase the value of a home inspection, impacting the sales contract and helping buyers negotiate for repairs as a condition of the sale.
While there are requirements that FHA mortgagees provide the home inspection messages early in the mortgage process, there is uneven application of this requirement.
This flaw in the process, by itself, can cause untold numbers of homebuyers/potential clients to neglect any consideration of a home inspection.
• The new law requires HUD to put new energy into this all-too-frequent problem that costs business to ASHI members.
• HUD staff are considering a Mortgagee Letter specifically addressing this point. ASHI believes that such a Mortgagee Letter would make it clear that mortga-gees need to present the home inspection materials to all prospective buyers at first contact — whether pre-qualification, pre-approval or initial application — regardless of whether the financing that is sought is FHA or non-FHA. At this writing, HUD continues to consider the Mortgagee Letter method and the content of the letter. But HUD staff accept that this is a problem that needs to be addressed in an authoritative manner.
C. Notify and provide pro-home inspection materials to HUD housing counselors
The law creates new requirements that HUD housing counselors provide pro-home inspection materials to the homebuyers they counsel.
Of course, ASHI supports the most authoritative, clear and mandatory methods of carrying out this obligation among all HUD staff and grantees across the country who provide HUD counseling.
• HUD is considering whether it would be preferable to address these obligations/activities in a new federal regulation that HUD is developing to implement the new law, or in the NOFAs (Notice of Funding Availability), of specific and crucial importance to HUD grantees who seek to do business with HUD), which also are under preparation. While these are different methods, both approaches carry very substantial importance and have unique, attractive features to ASHI.
• ASHI suggests a dual approach, a blending of both methods to achieve the benefits of both. A regulation clearly establishes implementation by HUD, with the permanence and ongoing life that is implied by a regulation. But NOFAs can be developed more quickly and have a more immediate impact on grantees who have direct contact with homebuyers.
• Further, ASHI requested that the HUD regulation specify that housing counselors not only provide the documents to their clients, but also require that the counselors explain, discuss the pro-home inspection documents and counsel clients regarding the documents inasmuch as that is a key element in serving the clients and fulfilling the intent of the law.
D. "Train the trainer"
In order for HUD housing counselors to counsel accurately and effectively on home inspections, they will require training.
ASHI is pleased to volunteer its technical expertise in implementing this aspect of the law, as a subject matter technical expert, to either assist HUD directly — or the HUD housing counseling grantees — in developing training materials, perhaps providing a training module to train housing counselors regarding home inspection and the required "For Your Protection …" and "Ten Important Questions …" documents. This may be best pursued by ASHI making direct contact with HUD housing counseling grantees, a matter under consideration. Such technical assistance could include tips on how to locate a home inspector.
In sum, ASHI is excited and pleased with the seriousness and energy displayed by HUD toward implementation. This is due, in part, to the foundation laid for the legislation with HUD while lobbying for the bill on Capitol Hill. While HUD staff could not be specific on dates and certain other points that remain to be settled, HUD does have NOFAs and a draft regulation under consideration at this writing. All of the issues discussed above are under active, serious consideration at this time.
Throughout this process, ASHI is positioned to remain in contact with HUD, be active and available as a technical resource and helpful guide as HUD creates a new, highly positive channel to homebuyers regarding home inspection.