New FHA Loan Program Availability
A new FHA loan program was instituted in October 2008 that has the express intent to insure $300 billion dollars worth of mortgage loan payments for 3 consecutive years. HOPE for Homeowners Act of 2008, previously signed into law, is intended to help those of you who are in eminent need of help to forestall foreclosure of your home mortgage.
If you qualify for the new FHA loan program, you can get an FHA backed loan to refinance your current mortgage at 90% of the present market value of your home regardless what you paid for it originally. You will also be eligible to receive a more comfortable fixed rate loan plus a 10% equity interest.
The new FHA loan program also contains a $7500 tax credit, which is intended to help you get a mortgage loan if you are a first time homebuyer or a new homebuyer. In expensive housing areas of the country, the mortgage loan limit is capped at $625,000. There is also a $4 billion grant, which expressly indicates its use for renovating homes in blighted areas. Additionally, the bill sets aside $180 million to provide homeowner counseling for those of you facing eminent foreclosure. The new loan program provides you the ability to cut your loan balance up to 40% plus maintain a 10% equity interest. To qualify, you must be in an owner occupied home, pay no more than 31% of your gross monthly income in mortgage payments and not be an owner of investment property. If you have defaulted on your current mortgage, you must prove it was not done intentionally.
An FHA lender will appraise your home at up to 90% of its current market value rate if you qualify for the program. The lender will be required to waive any fees or penalties if you are in dire financial straits. Also, you must agree to a shared equity schedule for five years except in loans that are made for home improvements or home maintenance.
This new FHA loan program should be a major help to many of you who have been stung by the current economic and housing crisis. While this program has certain constraints it certainly beats the alternative option of losing your home forever to foreclosure. To determine if you qualify for this program contact your local HUD authorized counselor or contact the FHA office directly.