August 1, 2017
In our last blog post, we discussed when a borrower is permitted to refinance a home loan using an FHA mortgage. But there’s one area not covered by the rules on refinancing with cash out or with no-cash out FHA refinancing. What about borrowers who are underwater on non-FHA mortgages, sitting in what in what is known by mortgage professionals as a “negative equity position”? Is there any help for these home owners? According to HUD 4000.1, the FHA loan handbook, there is a program called the FHA Short Refi, which “allows the Mortgagee to refinance a non FHA-insured Mortgage in which the Borrower is in a negative equity position”. That could be good news for some who badly need to get back on the road to building equity once | more...
December 21, 2016
HUD 4000.1 is the FHA single family home loan rule book. Whether you are purchasing a suburban home, a condo unit, or a mobile home with an FHA mortgage, the rules in HUD 4000.1 pertain to your FHA loan transaction. This set of rules also includes guidance on FHA refinancing loans including a program known as an FHA short refi loan, also called “Refinance of Borrowers in Negative Equity Positions Program”. This program, according to HUD 4000.1, “allows the Mortgagee to refinance a non FHA-insured Mortgage in which the Borrower is in a negative equity position”. That’s commonly known as being “underwater” on a home loan. An FHA short refi requires the lender to “write off at least 10 percent of the unpaid principal balance”. The borrower must be in | more...
January 29, 2016
We’ve gotten some questions recently about FHA mortgage loan amounts, so it seemed like a good time to post the FHA loan rules found in HUD 4000.1 about how maximum loan amounts are calculated. There are FHA loan guaranty limits and FHA mortgage loan amounts–the two shouldn’t be confused as FHA mortgage loan guaranty limits refer to the amount of money the FHA will guarantee for the loan, whereas the maximum loan amount is the highest amount for a specific transaction that the lender/FHA loan rules will allow. FHA loan rules say the maximum can be affected by the type of transaction. You can find the FHA maximum guaranty amounts for your housing market at the FHA official site: https://entp.hud.gov/idapp/html/hicostlook.cfm. HUD 4000.1 says of maximum loan amounts: “A Mortgage that | more...
January 13, 2016
If you are thinking about your refinance loan options in 2016, now is a good time to review some FHA refi facts. Planning for an FHA refinance loan is important, and if you start early the same way as preparing for the original purchase of your loan you may save yourself valuable time later on in the process. It’s important to take enough to time to review your recent credit history, make sure you have no late or missed payments in the 12 months leading up to the loan application, and make sure there are no errors or evidence of identity theft on your credit report. Here are some basic facts–and fictions–about FHA refinancing: FACT: FHA refinance loans are available for existing FHA loans and non-FHA mortgages alike. You can | more...
March 31, 2015
A reader asks, “Will the FHA Short Refinace Program give the lowest interest rate? Secondly, will there be a refinance charge? Does this work with Fannie Mae?” This reader question refers to the FHA Short Refinance Loan Program which was extended last year to 2016 and is intended for borrowers who find theselves “upside down” or “underwater” on their home loans. According to an FHA fact sheet published at FHA.gov: “FHA’s Refinance of Borrowers in Negative Equity Positions (“Short Refinance”) is available to help people who owe more on their mortgage than their home is worth because their local markets have seen large declines in home values. The temporary enhancements to the existing refinance program apply to loan applications with FHA case numbers issued on or after September 7, 2010 | more...
November 6, 2012
Earlier in 2012, the FHA announced some changes to its FHA Short Refinance program, which was originally announced in 2010 in a Mortgagee Letter titled ” FHA Refinance of Borrowers in Negative Equity Positions”. This program, also known as the FHA Short Refinance, is designed to allow “responsible homeowners with negative equity an opportunity to refinance their homes. These enhancements were designed to maintain homeownership by providing borrowers with conventional loans, who owe more on their mortgage than the value of their home, opportunities to refinance into an affordable FHA loan.” “This opportunity allows only non-FHA insured loans to qualify for an FHA refinance loan provided that the lender or investor writes off the unpaid principal balance of the original first lien mortgage by at least 10 percent.” The changes | more...
March 20, 2012
Recently we’ve been reporting on the latest policy changes to the FHA Short Refinancing Loan program. There’s one last change to cover–the new rules for debt to income ratios. For the FHA Short Refinancing Program, the maximum debt to income ratios have changed in some situations. The FHA mortgagee letter outlining changes FHA Short Refinance loans states: “Mortgagee Letter 2010-23, provides specific guidance for debt-to-income ratios for loans that
March 19, 2012
In our last blog post we discussed changes to the FHA Short Refinancing loan for conventional borrowers. The FHA Short Refinancing programs allows borrowers with conventional loans and who are underwater on their mortgages to save their property by refinancing into a more affordable FHA home loan. According to the FHA,
March 16, 2012
Being “underwater” on a home loan means owing more on the property than the home is worth. In the last few years, this is a problem faced by more home owners across the nation due to the housing market crisis. In response to this, the Federal Housing Administration took action. In 2010, the FHA published a mortgagee letter outlining details of a plan called “FHA Refinance of Borrowers in Negative Equity Positions
February 25, 2011
In our last blog post we discussed some changes to FHA refinancing loan rules. Effective immediately, the FHA requires all borrowers seeking streamline refinancing to make at least six mortgage payments on the property. There must also be a minimum of