FHA Mortgage Assistance
On April, 9th, 2008, the Bush Administration announced that they were expanding the HUD's FHASecure program. Now this program will provide additional mortgage assistance for subprime borrowers who are at risk of foreclosure.
This expansion of the program will help more homeowners who are having trouble keeping up with their mortgage payments on high-cost subprime loans. The Bush Administrations expects around a total of 500,000 families to refinance into a prime-rate FHA-insured mortgages by year's end.
This plan was made to help address the adverse economic conditions affecting many communities and homeowners across the United States and will help to break the cycle of house depreciation, which is being caused by an increasing number of foreclosures and the overall contraction in the credit market. This expansion will increase the flexibility to insure more mortgages. This includes the borrowers who were late on a few payments and/or received a voluntary mortgage principal write-down from their lender.
In 2007, the FHA modified its refinancing program to include homeowners with respectable credit that had missed payments after their teaser rates reset. With the recent expansions for the FHASecure program, homeowners who meet the above criteria must fall into one of the categories below to be eligible for the new program:
- 1. Borrowers with adjustable rate mortgages who were late on two consecutive monthly mortgage payments or at two different times over the previous twelve months. FHA will require a 97 percent loan-to-value (LTV) ratio for these borrowers to refinance, the same LTV as FHA's current standard.
- 2. Borrowers with adjustable rate mortgages who were late on three consecutive monthly mortgage payments or at three different times over the past 12 months. FHA will require a 90 percent LTV ratio for these borrowers to refinance.
The extension of the FHASecure Program will:
- 1. Help additional borrowers access a more affordable refinancing program
- 2. Offer lenders an alternative to foreclosing on these individuals
To learn more about this and other FHA options visit the official FHA Secure website.
Return back to the FHA Mortgage Center home or the FHA Lending Guide.