January 21, 2022

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Do I Qualify for an FHA Short Refinancing Loan?

In 2010, the FHA made changes to its refinance program to let borrowers who owe more on conventional home loans apply for something commonly known as the FHA Short Refinance program. These FHA refinancing loans are an important option for borrowers who find themselves in difficult financial situations and know they can’t avoid foreclosure by selling the home.

An FHA Short Refinancing loan makes a lot of sense for borrowers in this position. But what does it take to qualify for the loan?

To begin, these loans are not for those currently holding an FHA mortgage. The FHA short refinance program is specifically for those with conventional loans.

The homeowner must be in what the FHA calls a “negative equity position” which simply means the borrower owes more on the home than it could sell for on the market. Applicants must be living on the property as the primary residence; summer homes do not qualify for this refinancing.

The rules also list specific credit requirements. According to the FHA, “The homeowner must qualify for the new loan under standard FHA underwriting requirements and possess a

Joe Wallace - Staff Writer

By Joe Wallace

November 29, 2010

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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About FHANewsBlog.com
FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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