Plan FHASecure - Refinance Option

Check if you qualify for the "Freeze Rate " Program

If you have an adjustable rate mortgage coming due or your interest rate is already too high, you owe it to yourself to look at the safe and affordable financing options provided by government-insured mortgages through the Federal Housing Administration (FHA). The FHA provide mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family, multifamily, manufactured homes and healthcare facilities. It is the largest government backed mortgage insurer.

WHAT IS FHASecure

FHASecure is a refinancing option that gives homeowners with non-FHA adjustable rate mortgages (ARMs), current or delinquent and regardless of reset status, the ability to refinance into a FHA-insured mortgage. With FHASecure, the lender will not automatically disqualify you because you are delinquent on your loan, and the lender may offer you a second mortgage to make up the difference between the value of your property and what you owe.

The FHA Secure program starts on July 14, 2008. The program FHASecure will help homeowners who can no longer afford their mortgages and missed UP TO three monthly mortgage payments over the past 12 months.

WHO IS ELIGIBLE FOR FHASecure

So long as you are current on your mortgage and have sufficient income to make the mortgage payment, you are eligible for an FHASecure refinance. If you are delinquent, the default must have been due to the payment shock of an interest rate reset or, in the case of an Option ARM, the "recasting" of the mortgage to fully amortizing.

By refinancing into a FHA-insured mortgage, you can expect to pay lower monthly mortgage payments. FHASecure can improve the quality of life for many communities by helping to reduce the number of mortgage defaults and bringing greater stability to local housing markets.

The elegible homeowners that want to use the FHASecure can refinance with FHA Loans and the lenders can voluntarily write down the outstanding subprime mortgage principal balances.

The new program will make possible for Homeowners that have sub-prime mortgages to refinance into prime – rate FHA Mortgages. Since this homeowners are considered more risky they will pay a higher premium for the insurance of their mortgage (2.25% instead of the regular 1.5%)

Borrowers refinancing into FHA from the subprime market are better off, even with slightly higher mortgage insurance premiums, because FHA insurance gives them access to substantially lower interest rates, and lowers their overall mortgage costs. The difference between the existing 1.50 percent upfront premium and a 2.25 percent premium for a $150,000 mortgage is only about $7 per month. With families turning to FHA in record numbers, the agency is on pace through its expansions to help approximately 500,000 families refinance into its affordable mortgage product by the end of this year.

Effective March 6, 2008, HUD will offer temporary FHA loan limits that will range from $271,050 to $729,750 (Limits). In January 2009, FHA's maximum loan limit will return to $362,790, unless the U.S. Congress approves bipartisan legislation to permanently increase loan limits as part of the FHA Modernization bill, which is still awaiting final approval on Capitol Hill.

[Update Nov 10, 2008] The FHA has set permanent new limits for FHA Mortgages from $271,050 in low cost areas to $625,500 in high cost areas read more here

Who is Eligible for the FHASecure Program ( Please read the FAQ for updated information)

To qualify for FHASecure, and include the delinquent loan payments, homeowners wishing to refinance must meet the following requirements:

1. Have a non-FHA insured ARM ( Adjustable Rate Mortgage ) that has reset or will reset
2. Sufficient income to make the mortgage payment
3. There is no limit in the time of payments you are late. Please read the FAQ for clarification of this point.

How to Apply

You can go directly to your lender and ask them if they participate in the FHA Secure program. You can also fill out the form on the right and we will put you in contact with an agency that can help you explore this and the other HopeNow programs. They also work with banks and private programs, so your chances of find a solution to your problem is higher.

Need the list of authorized agencies that help you in your city? - Fill out the form on the right, you will see the Hope Now Agencies.

Frequently Asked Questions about FHASecure
(Official information from the FHA)

How far behind can you be on a mortgage to qualify? What about more than 90 days?

There isn't a limit on how far behind you can be on your mortgage or how many payments you've missed. Whether you're current, one month behind or multiple payments behind, the amount you can refinance will depend on the value of your property and how much you owe and if the lender, or another eligible source, is willing to take back a second mortgage to help bridge the gap between what is owed and your home's value.

Must I be delinquent, and for a certain period of time, in order to be eligible for FHASecure?

No, and FHA encourages homeowners facing reset to refinance before they fall behind on their mortgage.

I have a fixed rate mortgage and have fallen on bad times. What about me?

Homeowners facing financial difficulties and unable to make their mortgage payments are strongly encouraged to contact their lender. Many lenders offer assistance to their borrowers to help them bring their mortgage current. Homeowners may also want to contact a HUD-approved housing counseling agency to find out about programs that may be able to assist them, especially if communication with the lender has broken down. To find a HUD-approved fill out the form and we will send you a list in your state.

I have an interest-only mortgage. Am I eligible for FHASecure?

So long as you are current on your mortgage, you are eligible for an FHASecure refinance. If you are delinquent, the default must have been due to the payment shock of an interest rate reset or, in the case of an Option ARM ( Adjustable Rate Mortgage ) , the "recasting" of the mortgage to fully amortizing.

Are there any programs for people already in foreclosure?

Yes, now you can apply to the Plan Life Line

What if I have a prepayment penalty and other refinancing costs and there isn't enough equity in my home for me to refinance?

If you do not have sufficient equity in your home to add your prepayment penalty and/or other refinancing costs into your new FHA mortgage, then you should ask your lender to consider a second mortgage to pay the difference or a short payoff on your existing loan. Offering either of these options is at the discretion of the lender.

What if the average home price is above the FHA loan limit for my area? Are the FHA loan limits changing for this program?

FHA's geographical loan limits and how much it can insure are established by law. Although the FHA insured mortgage cannot exceed those loan limits, when a lender is willing to combine a first and second mortgage, the amount of the second could exceed the maximum loan limit for your area.

Does it matter that the value of my home is now less than what I still owe?

Not to FHA but the mortgage lender considering the refinance would have to be willing to accept a short payoff on the existing loan OR to hold a second mortgage to make up the difference needed to pay off the existing mortgage and the home's value.

If I have first and second mortgages can both loans be included in FHASecure?

Yes, but only if the combined amount is within the FHA geographical loan limit. If the combined amount exceeds the FHA loan limit and/or the loan-to value limit, your lender could offer you a second mortgage to make up the difference.

How can FHA help homeowners stay in their homes?

FHASecure gives homeowners with non-FHA adjustable rate mortgages (ARMs) ( Adjustable Rate Mortgage ) , current or delinquent and regardless of reset status, the ability to refinance into a FHA insured mortgage. With FHASecure, the lender will not automatically disqualify you because you are delinquent on your loan, and the lender may offer you a second mortgage to make up the difference between the value of your property and what you owe, including standard refinancing costs.

Why should I consider refinancing into a FHA insured mortgage?

FHA insured mortgages do not allow for prepayment penalties, teaser rates or balloon payments. They are offered at market rate with terms up to 30 years and are fully amortized, meaning that you pay towards principal and interest every month.

Is this program going to help people who shouldn't have gotten a home loan in the first place?

People will still have to qualify for a FHA insured mortgage, based on their capacity to make the monthly mortgage payments. Unfortunately, those who shouldn't have gotten a home loan in the first place will not be able to qualify for FHASecure or other FHA refinancing options. They should contact their lender or a HUD-approved housing counseling agency for assistance ( Fill out the form and I will send you a list of the ones in your state).

Does this program help responsible people who pay their bills on time?

Any homeowner who is current on their mortgage can refinance to a FHA insured loan at any time if it makes financial sense for them to do so. And for those homeowners with non-FHA adjustable rate mortgages who are current but owe more than their home is worth, it is now possible for them to refinance into a more affordable FHA insured mortgage and the lender may execute a second mortgage at closing to pay the difference.

We can put you in contact with a mortgage agency that we trust and that will offer you the lowest rate possible. If you wish you can send us some information and they will contact you soon.

The FHA Secure program that began in September 2007, ended in December 31, 2008. The government have other programs available if you are having problems paying your mortgage and facing foreclosure.

Please visit the other pages with information about the other Hope Now Programs:

• Hope for Homeowners
• Streamline Modification Program
• Project Lifeline