FHA Refis for Underwater Borrowers
Topic: Government / Legislative
FHA has launched a refinancing program to assist homeowners who owe more on their mortgages than their home is worth. Beginning Sept. 7, the agency will offer qualified non-FHA borrowers the opportunity to refinance with an FHA-insured mortgage on their primary residence. Borrowers must be current on their existing mortgage, qualify under FHA underwriting requirements, and have a credit score of at least 500. The first lien holder must agree to write off at least 10 percent of the remaining amount owed under the mortgage, bringing the combined loan-to-value ratio of all mortgages to no more than 115 percent. The LTV for the new FHA mortgage may not exceed 97.75 percent. The Treasury Department will provide incentives to second lien holders who agree to forgive all or part of their liens.