Hope for Homeowners Program: Refinancing Opportunity for Borrowers
With all the latest legislation passing through Congress specifically aimed at the housing market, it’s getting not only harder to get loans but more difficult to understand it all. Luckily, the HOPE for Homeowners Program looks to be one with a basic breakdown. The program has authorization under the National Housing Act, which was amended earlier in the year by the Housing and Economic Recovery Act of 2008.
What Does It Say?
HUD issued Mortgagee Letter 2008-29 detailing what this program includes. First, it gives any current or delinquent borrowers the ability to refinance into a 30 year fixed rate loan through FHA. In order to qualify for this aspect, you must have made at least six payments on the mortgage prior to requesting the refinance.
Additionally, the program is designed for those who have a debt to income ratio higher than 31 percent with their current home loan. The original loan must originate prior to January 1st, 2008.
- Payment to income is limited to 31 percent while debt to income is limited to 43 percent.
- These numbers may be higher, according to the program, following a three-month trial modification put in place through the program first.
- There is a maximum loan of $550,440 on all loans through the HOPE for Homeowners program, (referenced as the H4H program.)
- There is also a restriction of a 90 percent loan to value in place on these loans.
- All homes must be owner occupied homes, on one unique properties
- FHA approved appraisers must appraise the properties within three months prior to the closing
- Origination fees are capped at 1 percent
- Buyers do not pay closing costs and prepaid items upfront
- A 3 percent upfront mortgage insurance premium and annual premium up to 1.5 percent will be applicable.
One of the unique aspects of the HOPE for Homeowners program is that lenders must insure that appraisals are complete within the letter of the law. In other words, they are responsible for any poor or fraudulent appraisals that lead to an FHA insured mortgage. Inflated home values, considered one of the problems within the housing market crash today.
More Information
The HOPE for Homeowners program promises to offer outstanding opportunities for homeowners to get out of the hole they are in. Namely, they are able to get into FHA loans with a fixed rate, often lowering the amount they must pay monthly.
The program is available to those who have government loans and conventional prime loans, as well as Alt-A loans and the worrisome subprime loans. This includes most types of mortgages, too, including negative amortization, payment option and interest only mortgages. There are legal restrictions, for example, any state or federal fraud conviction within the last ten years can disqualify an individual from obtaining the loans.
For homeowners struggling with their current loans, falling within these areas, there is no doubt that the HOPE for Homeowners Program offers a lifeline. It is highly encouraged that you seek out FHA lenders to get the process started.
Tags: FHA, FHA Loans, Hope for Homeowners
October 19th, 2008 at 2:51 pm
I would like information on refinancing with FHA.
I am a Realty Broker qualified by HUD. What is the process for my clients?.
October 20th, 2008 at 6:19 pm
I have a first mortgage with Citi Mtg balance approximately $103,450. A second Mtg with Webster Bank with a balance of approximately $24,478.
The original loan on my town home was $132,500.
The purchase date was around July 2006.
My homeowners insurance has put the value of the home to be around $140,000
I am not behind on my mortgage payments.
First mtg = $1,219. Second Mtg $266.81
Home Owners association dues $140.
The first mtg is at 6.75% 30 year loan
The second mtg is at 8.25% 15 year loan.
I was married at the time of the purchase.
My personal circumstances have changed.
I do not bring home enough to cover all of my monthly obligations including food, gas and utilities.
My daughter has been helping me to make ends meet.
I will be 64 December 20, 1944.
My credit score is “good” there are several inaccuracies on my credit report.
I did file a joint bankruptcy in 2007 this was discharged in April of 2007.
I have talked to refinace representatives and they told me that I would be a good candidate but, I would need to wait until April of 2009 to be eligible.
My daughter now has health problems and she is pregnant so, I am unsure as to how much longer she will be able to help me.
I am employed and my income is $47,400 annually.
Will this program help me? Do I have to wait until April 2009 to try to refinance.
I hesitate to make official inquiries because each time you do that, there are multiple inquiries on the credit reports and that can be detrimental to my over all credit score.
One reporting agency shows over 700, one shows 688 and one shows 690
Thank you so much