Posts Tagged ‘fha loan assistance’

FHA Underwater Mortgage Refinancing Requirements 2011

FHA Negative Equity Mortgage Refinance Program 2011

Struggling underwater? There might be some hope for you with the FHA underwater mortgage refinancing program for 2011. The common way to refer to negative equity positions on mortgages, is to call them ‘underwater’. It is estimated that about 3-4 million borrowers and homeowners are now ‘underwater’, they have a mortgage loan which they borrowed before 2009, and they market value of the house has plunged. These 3-4 million Americans have mortgages which are worth more than the value of the home they own.

The Making Home Affordable Program (MHA) goals are to solve these kind of problems to help as many Americans be a proud homeowner.

This situation is unfair to the homeowners as they are paying high interests (from before 2009) on large amounts (like the home value back then) while actually the current rates are lower and the value of the homes is substantially lower. The lenders are at risk too, because if the borrowers failed to pay the mortgage payments, they will have to sell the homes as foreclosure, and these homes are worth less than the amount owed.

Underwater Refinancing Is An Option for Lenders

The U.S. Department of Housing and Urban Development (HUD) released a program with the FHA to help million of homeowners which are currently underwater, to refinance their mortgage. The program is set to run from 2010 till 2012, so now at the mid of 2011 it might be a good chance to solve any underwater mortgage refinancing, with the FHA offer.

The special thing about this FHA underwater refinancing, is that though it is an FHA refinancing program, it is a voluntary option for the lenders. There is no way the federal government can make lenders join or decide which mortgages to refinance, but after placing some basic guidelines for underwater refinancing, more and more lenders join.

The FHA has sent a mortgagee letter to all mortgage lenders with the specification on the underwater refinancing process, guidelines and requirements. You can read below the main key underwater refinancing guidelines and FHA refinancing requirements for this option.

FHA Underwater Refinancing Requirements 2011

The FHA and the HUD have some basic underwater refinancing requirements, these requirements are for the borrowers and the mortgagee lenders. All these FHA underwater refinancing requirements make sense and are planned to help as many people who are ‘drowning’ underwater.

 There are requirements from the borrower to meet some conditions to be able to qualify, and there are specific conditions for the lenders what is expected from them withing this program guidelines.

Who Is Eligible For Underwater Refinancing

• Negative Equity – Well the borrower must be currently in an underwater mortgage situation to be able to qualify.
• No Late Payments – The homeowner must be current on mortgage payments. Because this is a voluntary program for the lenders.. no one would refinance for an unifying borrower.
• Current Home Residence – The borrower must be living in the home being refinanced for qualifying. The program is meant to help homeowners and not real estate investors. 
• Non FHA Loan – The underwater program is not for FHA home loans. It must be a private regular mortgage.
• Meet FHA Loan Requirements – The borrower must meet the minimum FHA requirements concerning mortgage approval. This means having a FICO score 500 or higher. To improve your FICO score in 37 days, see here.
• Lien Holder Write Off 10% - The existing first lien holder must write off at least 10 percent of the unpaid principal balance.
• LTV of 97.75% – The Loan to Value ratio for the FHA insured loan must not exceed the 97.75 percent.
• All Mortgages Will Not Exceed LTV of 115% – If the lender has more than one mortgage on the property, than by the FHA underwater refinancing requires, they must all be blended to the maximum of 115% of LTV loan to value ratio.
• Front End/Back End Debt To Income Ratio – The FHA and the lenders are worried whether the borrower will be able to stand the new mortgage offer. For this reason they require a ‘front end debt to income‘ ratio of 31% and a ‘back end debt to income’  ratio of 50%.

FHA Mortgage Underwriting Requirements

As you may know, the FHA is not granting funds for mortgages, the government administration is insuring the mortgages for the lenders, and backing the borrowers obligation to pay the mortgage in full. For this reason the FHA has it’s own underwriting processchecking and pre qualifying the borrowers.

With underwater refinancing requirements, the underwriting process is the same, and the lenders need to use the FHA TOTAL process for the evaluation of the risk classifications. If the TOTAL process of risk classifications has “proved” the borrower, then the lender does not need to over-check the lender again. So once as a borrower you have a FHA refinancing ‘clearance’ you are OK as far as the lenders are concerned.

It is the lenders responsibility to check the data they sent, and be sure that all the information has been evaluated. They need to make sure that Direct Endorsement Underwriter has seen the appraisal.

Underwater Refinancing HARP and HAMP

The federal government (HUD and FHA) has issued programs to help underwater homeowners. The two refinancing options seem the same, but they have some fine differences between them.

HARP (Home Affordable Refinance Program) was made to help underwater refinancing, the main requirements are LTV of 105%-125% (loan to value) and the borrower must be never late on payments for the last 12 month. The mortgage refinanced must be owned by Fannie Mae or Freddie Mac.

HAMP (Home Affordable Modification Program) was made for those facing foreclosure. The basic HUD requirements are that the mortgage is owned by Fannie Mae or Freddie Mac or the U.S Treasury. And there are signs for immediate danger for the survival of the mortgage as it is. Within the HAMP there is an incentive for the lenders to change some mortgage terms.

FHA Underwater Refinancing Conclusion

If you are a homeowner and you are ‘underwater’ the best thing to do, is to find which of the underwater refinancing programs is best for you. Since most of those refinancing programs are voluntary for the lenders, you will have to show that you are a customer they are willing to accept.

Though the FHA minimum FICO score is 500 there is likely not to be any bank who will want a new costumer with such a poor credit score. The minimum FICO score for the FHA mortgages is 580, but lenders today approve applications with a score over 620 and 640, this is called overlapping. So if your score is lower than that you must begin fixing your credit score, it is a long journey, but it is worth to begin it as soon as possible.

For the best option to be approved for the FHA underwater refinancing requirements,  you must raise your credit score, so you will have better chances getting approved by the lenders. See the 37 days credit repair program.

Home Buyer 2011 Assistance Programs

First Time Home Buyer 2011 Assistance Programs

 Understanding rights in first time home buyer assistance programs is vital if one hopes to be able to get a home for the very first time and one is taking advantage of one of these very helpful programs. New homebuyers financial assistance comes in a great many forms, when it has to do with home loans. You will need to be thorough too when it comes to looking for such help.

Need Excellent Credit?

The first thing that prospective 2011 first-time home buyer will be looking for assistance, may certeinly be getting no down payment loans. It is no secret that a first-time buyer will have a harder time getting one of those mortgages if a credit score is not excellent! If you want a one in a lifetime shot at getting an excellent credit, it can be done! And it can be done in 15 days! See below.

There is a 100% legal way to get PERFECT credit, many doctors and lawyers use it, to get their mortgages approved. There is no need to be rich to use this method. If you are tiered and hopeless from fixing or repairing your credit, you can sign up and get excellent credit in 15 days. Remember it is a one in a lifetime opportunity, so if Yuh have other ways to pump up your credit score used them before you apply to this method.

HUD Assistance Programs

 There are some assitance programs for homebuyers, but they all have to be approved by the HUD. While everyone has a right to apply for first time home buyer financial aid but nobody has the right to expect it to be approved automatically. Most of the HUD grants are states and emloyments grants like the VA loans, the USDA grants for no money down loans, police and teachers grants.

Generally speaking, most 2011 first time home buyer assistance programs are run by the states and administered through lenders certified by the U.S. Department of Housing and Urban Development  to provide programs such as these. The states get federal dollars, even for structuring Federal Government loans for first time home buyers , they then give these grants to people who will be willing to move or work at specific cities or zip codes.

If you are refinanacing, you can access these grants by applying to your state or county, you might be surprised to find grants and low refinance home mortgage rates, offered by the county.

Take Action

It’s smart, then, to go online and use a search engine and an appropriate phrase related to first time home buyer assistance and then begin to prioritize the results. If one is looking for just assistance and one already has an excellent credit score, the process should be fairly straightforward.

For those who are looking for first time home buyer assistance and have either little credit or none at all, it’s going to take a little more work. They can still obtain a perfect credit to show in 15 days and get any loan they need approved ASAP.

For people who for any reason prefer to stay with their poor credit, every state – for the most part – offers some sort of housing assistance grant or funding program. These programs offer a good way to get an attractive home loan through first time home buyer education programs certified lender-administrators. Most of the large national mortgage banks participate in these programs as does just about every community bank or credit union.

There Is Hope

Classically, savings and loan institutions – which have been chartered specifically to help their members buy homes – have always had some sort of first time home buyer assistance available. Another way may be to ask the lenders, they know!  You can try to even access special loan officers to find grants that can make home ownership a reality. Make sure to check online and then with a lender when it comes to 2011 first time home buyer assistance information and funding.

Your first action now may be to fix your credit in 37 days or get a new credit in 15 days.