FHA Loan Articles
News, updates, and explanations to keep you informed.
The FHA Short Refinance Option-Help For Non-FHA Borrowers
Starting September 7, 2010, the FHA offers help to qualifying non-FHA borrowers who are "underwater" on their home loans. The FHA Short Refinance option is open to those who are current on their existing mortgage-but the lender must agree to forgive at least 10% of the unpaid principal on the original note to bring the combined loan-to-value ratio to a maximum 115%. The new FHA-guaranteed loan must have a loan-to-value ratio of no more than 97.75%.
Non-FHA borrowers who meet these guidelines and additional credit qualifications (see below) are allowed to apply to refinance into new FHA-insured home loan. The program is not open-ended-the original FHA press release announcing the start date of the FHA Short Refinance option says the program is expected to help as many as four million homeowners through the end of 2012.
The FHA press release says the FHA Short Refinance program is voluntary and "requires the cooperation of all lien holders". This program is not automatically open to any homeowner who is underwater on a conventional home loan; as stated previously, there is a requirement that the borrower be current on all mortgage payments. They must also qualify for the FHA Short Refinance program by having a credit score of 500 or better and meet other typical FHA loan
FHA Short Refinancing is only for borrowers who are underwater on properties that are considered the borrower's primary residence, and is intended only for those with non-FHA guaranteed home loans. A borrower said to be "underwater" on a conventional home loan is basically stuck with a property that isn't worth as much as the amount owed on the note-usually because of declining property values.
FHA NEWS and RELATED ARTICLES
When applying for an FHA home loan, some lenders may ask for tax paperwork as part of the application process. Some borrowers may wonder if this is legal, or an acceptable practice for home loans in general.
There are many questions about the official FHA loan rules for occupancy for single-family home loans. According to FHA rules, a borrower must occupy the home purchased with a single-family FHA loan as a personal residence as a condition of loan approval.
After the housing market crisis of the previous decade, many mortgage borrowers found themselves having trouble making their monthly payments. In some cases, borrowers just walked away from the mortgage completely and allowed the home to be foreclosed upo
The FHA has announced it would accept electronic signatures (also known as e-signatures) on several FHA home loan documents. The new policies are found in detail described in FHA Mortgagee Letter 14-03.
Some of your FHA loan closing costs may be financed, and some may--after being negotiated between buyer and seller--be paid by the seller within the boundaries of the FHA loan programís rules. The borrower can also pay some closing costs out of pocket.