FHA Offers Relief to Homeowners with FHA Secure

President Bush recently announced that HUD’s FHA will be able to help an estimated 250,000 homeowners avoid foreclosure by enhancing some of its refinancing guidelines effective immediately.

The FHA secure initiative is a temporary program designed to provide refinancing options to borrowers of conventional adjustable rate mortgages (ARM) who are delinquent under their current mortgage as a result of an interest rate adjustment.

Eligible borrowers must be able to demonstrate that they were current in their mortgage payments prior to the interest rate adjustment of their ARM and are now delinquent due to the subsequent increase in monthly payments. Borrowers may be able to include the past due payments in their new FHA loan subject to FHA loan limits and loan-to-value limits.

Eligibility Criteria for FHA Secure Refinance Option:

• The current mortgage must be a non-FHA ARM
• The new FHA mortgage may be fixed or adjustable
• The borrowers’ payment history must show that they were current on their payments prior to their interest rate adjustment
• The borrowers must qualify for a new FHA mortgage using standard FHA guidelines
• If there is sufficient equity in the property, the new FHA loan may include past due mortgage payments up to the FHA loan limits
• Borrowers may obtain secondary financing if the new FHA mortgage is not sufficient to pay off the existing first lien plus closing costs

If you have an adjustable rate mortgage, and are delinquent due to increases in your interest rate, contact me or your current mortgage lender to see if this option can help you.

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