| HA Secure program was introduced in late 2007 by | | | | help determine whether your loan can be refinanced |
| the Federal Housing Administration and President Bush. | | | | into an FHA Secure loan. These factors include a |
| Unlike most other FHA loan programs, this program is | | | | pre-payment penalty or a current home value that is |
| designed for homeowners who are at risk for | | | | lower than the loan balance. |
| foreclosure due to steeply increasing payments on | | | | If your current loan has a pre-payment penalty, you |
| adjustable-rate mortgages. The majority of people in | | | | have three options: |
| the program have subprime loans, but homeowners | | | | * Come up with the cash to pay it |
| with hybrid ARMs, option ARMs, and prime-rate ARMs | | | | * Roll it into your new loan |
| may also qualify. | | | | * Negotiate with the lender to forgive the penalty. |
| FHA Secure Eligibility | | | | In order to roll the penalty into your new loan, the |
| Contrary to initial reports, you don't have to be | | | | penalty plus the old loan balance and any closing costs |
| delinquent on your mortgage in order to qualify. You | | | | being included in the new loan must not exceed 97% |
| also don't have to wait until your rate resets to apply | | | | of your home's current market value. |
| for a loan under the program. | | | | Many homeowners who bought at the peak of the |
| If you meet the following requirements and lending | | | | market find that their homes are now worth less than |
| standards, you may be eligible to refinance through the | | | | their loan balances. FHA loans do not automatically |
| program: | | | | reduce your previous loan balance to an allowable |
| * Original loan was not an FHA mortgage | | | | level. If you owe more than the home is worth, you |
| * Payments prior to the reset were current | | | | have three options: |
| * No late payments in the six months prior to the reset | | | | * Negotiate with the lender to accept a short pay-off |
| * Adequate income to meet payments under a new | | | | * Apply for a small second loan to cover the |
| mortgage | | | | difference between your new loan and the old loan |
| * Debt-to-income ratio less than 43% | | | | * Pay the difference between loans in cash. |
| * Minimum 3% equity in the home | | | | If the only other option is foreclosure, your lenders may |
| * Rate has reset or will reset by December 31, 2008 | | | | be motivated to negotiate the pre-payment penalties |
| * Remaining loan balance is lower than the local loan | | | | or a short pay-off, but it's not required to. |
| limit. FHA loan limits (FHA-loan-limits) are now regionally | | | | Benefits of the Program |
| determined, so check to see whether your loan is | | | | The program offers numerous benefits. If you qualify, |
| within the range. | | | | your original loan will be refinanced into a fixed-rate |
| If you're delinquent on your mortgage, the default must | | | | thirty-year mortgage. The interest rate is often lower |
| be due to interest rate shock. If you're in default due to | | | | than you'd receive with a conventional loan. In addition, |
| other factors, you may not qualify for the program. | | | | the underwriting standards are more flexible than |
| How to Apply for the Program | | | | non-FHA loans. Finally, an FHA Secure loan can save |
| If you believe you're eligible, contact an FHA-approved | | | | you from foreclosure and allow you to stay in your |
| lender. They can discuss your options and determine | | | | home. |
| whether you're likely to qualify. You can also check | | | | If you're at risk for foreclosure, you owe it to yourself |
| your potential eligibility by completing a home loan | | | | to check out the program and determine whether |
| request through Bills. | | | | you're likely to qualify. The first step is reviewing the |
| Additional Loan Factors | | | | FHA Secure Fact Sheet. |
| In addition to the above qualifications, additional factors | | | | |