FHASecure is available, but seems to have big problems. I had a lengthy discussion yesterday with a loan officer at a lender that was offering the program. FHASecure, launched several weeks ago, was intended to be a way for Americans to get out of adjustable rate mortgages and secure long term fixed rate financing. President Bush enacted the program in an effort to provide relief for those losing their homes due to the current subprime crisis.
From the FHA Website here is a basic description:
WHAT IS FHASecure
FHASecure is a refinancing option that gives credit-worthy homeowners, who were making timely mortgage payments before their loans reset but are now in default, a second chance with a FHA insured loan product.
WHO IS ELIGIBLE
To qualify for FHASecure, and include the delinquent loan payments, homeowners wishing to refinance must meet the following requirements:
- Have a non-FHA insured ARM that has reset;
- Sufficient income to make the mortgage payment; and
- A history of on-time mortgage payments before the loan reset.
The program, although well meaning, has serious problems. According to the loan officer I spoke with yesterday, he can only get one person out of ten approved. In order to qualify, your home must appraise for the amount of the loan. This is unlikely if you used 100% financing and home prices have dropped in your area. Secondly, you must have a traditional income source. FHA secure does not offer flexible programs for the self employed, individuals with tip income, or anyone with other than regular W-2 employment. Lastly, you must have good credit and an on time payment history on your mortgage (until the rate reset).
Based on these requirements, you might have little success looking for help if you are behind on your current mortgage or in a non-traditional income situation. I wish I had better news, but FHASecure seems to be too little too late.
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