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FHA Offers “Hope for Homeowners”

by Karen Lawson
December 6th, 2009

Homeowners struggling with mortgage payments due to financial hardship, property devaluation, or other circumstances beyond their control may qualify for an FHA refinance mortgage under the Hope for Homeowners (H4H) program.

Hope for Homeowners (H4H) is a program designed to assist struggling homeowners who cannot refinance through traditional channels due to financial hardship and/or decreased home value. Here are basic eligibility requirements; please contact your mortgage lender or an FHA approved lender for specific details.

Eligibility

  • Your existing home loan must have been made on or before January 1, 2008.
  • Your mortgage is secured by a one-to-four family residence, which you occupy.
  • You must be able to afford closing costs and up front mortgage insurance premium (UFMIP).
  • You do not own any other real estate (except property you’ve inherited).
  • You must not have intentionally defaulted on any loan of $100,000 or more within the last five years (This means that you did not willingly allow such a loan to default when you had adequate assets for making payments).
  • You have not been convicted of fraud within the last ten years.
  • Your net worth cannot exceed $1,000,000 with the exception of eligible retirement plans.
  • If you’ve missed any mortgage payments, you must have made at least six full payments during the life of your loan.
  • Existing lien holders must agree to accept the proceeds of the H4H refinance as full payment, and to release their liens.
  • Applicants who’ve filed bankruptcy may still be eligible.

Mortgage lenders may require additional information and verification depending on individual circumstances.

Loan amounts cannot exceed 90% to 105% of your home’s current value depending on individual loan underwriting; your loan amount will be determined by your lender. Refinancing your mortgage through H4H must result in a total mortgage payment amount of no more than 31% of gross income.

How an H4H Refinance Mortgage Can Help

Going from “upside down” to back on track: If you owe more on your mortgage(s) than your home is worth, an H4H refinance can help you regain financial security by refinancing your loan to a new 30-year fixed-rate mortgage (FRM). This stabilizes monthly payments and may hep with rebuilding home equity. In some cases, your new loan amount may be reduced, and your monthly mortgage payments (principle, interest, taxes and insurance) will not exceed more than 31% of your gross income.

Eliminate exotic loan features: By refinancing into a 30 year FRM, you can eliminate mortgage features that prevent you from paying off your mortgage faster. These features can include negative amortization, deferred interest, and interest-only payments.

Provide a fresh start: If you’ve missed payments, and H4H refinance can give you a new start. Call your mortgage lender today. If your mortgage lender doesn’t participate in H4H refinancing, contact a HUD housing counselor or an FHA approved lender for assistance.

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This entry was posted on Sunday, December 6th, 2009 at 11:42 am and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

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