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FHA Secure Refinancing: Foreclosure is a bigger threat than ever, but fortunately the FHA has stepped in to help with FHASecure Refinancing.

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June 23, 2018
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FHA Secure Refinancing

Borrowers Benefit By Avoiding Foreclosure

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, and other approved purchases such as manufactured homes. The FHA does not issue the loans themselves, but FHA mortgage insurance is quite attractive for a prospective lender because FHA mortgage insurance protects the lender's investment. Should a homeowner default on the mortgage or go into foreclosure, the FHA pays the lender.

Loans insured by the FHA feature low down payments, and costs for FHA mortgage insurance are built into the mortgage payment. Those costs disappear five years into the loan or when the loan reaches 78% of the property value (whichever is longer).

Many homeowners with adjustable rate mortgages find themselves in financial trouble because of current interest rate increases. Foreclosure is a bigger threat than ever, but fortunately the FHA has stepped in to help with FHASecure Refinancing. Starting July 14, an expanded FHASecure refinancing plan allows homeowners who have missed up to three mortgage payments in the last 12 months under certain circumstances to avoid foreclosure with FHASecure.

You don't need an existing FHA home loan to qualify for an FHASecure refinance loan - the program is designed to specifically to help those without FHA loans to get lower payments, prevent default and foreclosure, and protect their investment.

  • Homeowners with current or delinquent non-FHA adjustable rate mortgages are eligible.
  • You are not automatically disqualified based on delinquency on your current loan.
  • You must have a dependable income and be able to make your mortgage payment.
  • If you are in default, you must show delinquency or default is the result of increased interest rates and the resulting higher mortgage payments.
  • If you are current on your mortgage payments, any type of conventional loan is 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" is not eligible under FHASecure.

FHASecure refinancing is available for single-family or multi-family homes and manufactured homes. A new FHA premium pricing plan goes into effect on the same date the expanded FHASecure refinancing program begins, July 14 2008. Borrowers should know this "second chance" refinancing does not indicate relaxed requirements for credit. Borrowers applying for FHASecure are subject to the same requirements as any other applicant for an FHA loan. Delinquency issues for mortgage payments aside, loan officers still require proof you are a good credit risk. Borrowers should;

  • Have steady income from a dependable source.
  • Show a reliable payment history on other debts.
  • Have a debt-to-income ratio below 41%.
  • Have a credit score appropriate for any home loan.

If you are need further explanation of the terms or conditions of FHASecure, be sure to ask your loan officer for clarification before you sign.

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FHA Loan Articles and Mortgage News

How to Prepare for an FHA Cash-Out Refinance Loan

June 11, 2018 - For those who want to cash in on the value built up in the home over time, the FHA cash-out refinance is an important option to consider. Be prepared for a new credit check and request copies of your credit reports. Then examine your FICO scores and your credit history carefully.

Which FHA Refinance Loan Is Right For You?

May 27, 2018 - When it’s time to refinance, the type of FHA loan you apply for will depend on the outcome of the loan-do you want cash out? A lower mortgage payment? Do you need to do rehab or repairs? Each refinance is different and there isn’t a one-size-fits-all solution.

Approving Your FHA Home Loan: Debt Issues

May 15, 2018 - How does your participating FHA lender decide to approve or deny your FHA mortgage loan? It doesn’t matter if you are applying for a construction loan, refinancing, or buying an existing home. Lenders must follow certain steps to determine your creditworthiness.

FHA Loans and Mortgage Insurance Requirements

May 6, 2018 - Conventional mortgages require private mortgage insurance (PMI) unless the borrower makes a  lender-prescribed down payment that eliminates the need.  FHA mortgage loans are different.  They don’t require PMI, but they do require an Up Front Mortgage Insurance Premium and a mortgage insurance premium (MIP) instead.

FHA Loan Eligibility Tips for 2018

April 11, 2018 - The timing of your FHA loan application and when you submit it are among the most popular FHA loan eligibility tips. What do you need to know about successfully applying for an FHA home loan? Here are some of the basics.

FHA.com Reviews

FHA.com is a one-stop resource for homebuyers who want to make the best decisions when it comes to their mortgage. With our detailed, mobile-friendly site, individuals can access information about different FHA products, the latest loan limits, and numerous other resources to make their homebuying experience easier. Take a look at some of the reviews from other FHA.com visitors!