FHA Loan Articles

FHA Secure Refinancing Cancelled

FHASecure was a temporary program put into law during the Bush administration. In order to qualify for the program as described below, applications had to be signed no later than December 31, 2008.

The Federal Housing Administration (FHA) was established in 1934 to offer mortgage insurance on loans through FHA-approved lenders. The FHA insures mortgages on single and multi-family homes. It is also approved for purchases such as manufactured homes.

The FHA does not lend money or issue the loans—instead it guarantees the loan making the risk minimal for the lender. Should a homeowner default on the mortgage or go into foreclosure, the FHA pays the lender.

Loans insured by the FHA have lower down payments than with conventional loans. Like conventional loans, FHA insured loans require the borrower to carry mortgage insurance, and costs for this FHA mortgage insurance are built into the mortgage payment. Mortgage insurance payments can end five years into the loan or when the loan reaches 78% of the property value (whichever is longer).

On July 14, 2008, an expanded FHASecure refinancing plan gave homeowners who missed up to three mortgage payments in the last 12 months to avoid foreclosure by applying for an FHASecure refinancing loan.

Borrowers didn’t need an FHA home loan to qualify for this FHASecure refinance loan. Homeowners with current or delinquent non-FHA adjustable rate mortgages were eligible. The other terms of this now-inactive program included a requirement for dependable income and ability to make mortgage payments. Borrowers who were in default on the original loan must show delinquency or default was the result of increased interest rates and the resulting higher mortgage payments. For borrowers who were not delinquent or in default, any type of conventional loan was eligible for FHASecure refinancing.
In addition to these specifications;

• Those who are current on mortgage payments can refinance non-FHA fixed rate or adjustable rate mortgages. Those who are behind on their mortgage payments may only refinance adjustable rate mortgages.


• Borrowers may be required to verify their mortgage payment history through the mortgage servicer or with cancelled mortgage payment checks.


• "Cash out refinancing" was not eligible under FHASecure.

Before the program ended, FHASecure refinancing was available for single-family or multi-family homes and manufactured homes.

FHA FORECLOSED HOMES

Find homes at 50% below market value. Search now for free!