HUD Short REFI-Will it Help NOVA Homeowners?

Before you run to your current lender and say make mine a Short REFI (refinance) take a deep breath.  One thing in this plan that could stop you in your tracks is the 97.75% loan to value ratio required.  For many Northern Virginia owners, especially those who purchased from 2004 to 2008 unless you made a significant down payment, you may be below the loan to value ratio outlined in the HUD information.

Okay now back to the beginning of the story.  HUD has announced “beginning September 7, 2010, the Federal Housing Administration (FHA) will offer certain underwater non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least ten percent of the unpaid principal balance of the first mortgage, the opportunity to qualify for a new FHA-insured mortgage.”

Here is a recap of the criteria for the new program

Homeowner must qualify under standard FHA underwriting requirements.
Homeowner must have a credit score equal to or greater than 500.
Homeowner must be upside down their mortgage.
Homeowner must be current on their mortgage.
Property must be the homeowner’s primary residence.
First lien holder must agree to write off at least 10% of their unpaid principal balance.
Current loan can not be an  FHA-insured loan.
Loan can not have a loan to value ration of more than 97.75%

The program is voluntary for lenders so if you are lucky enough to be a Northern Virginia homeowner who meets all of the criteria and your lender isn’t participating…oh well. However if the stars are aligned and they sign the Servicer Participation Agreement with Fannie Mae then you might be one of the lucky ones who could see a little assistance with your principal balance.

Check with your lender after September 7th and see if they are participating in the program.

I’ll look forward to hearing from homeowners who are able to take advantage of this new program.

4 thoughts on “HUD Short REFI-Will it Help NOVA Homeowners?

  1. Hey Cindy, This blog is a fortunate thing for Northern Virginia homeowners. I am sure you have made it very clear about the complicated HUD new program.

    It is very very very helpful for the Northern Virginia homeowners. Keep updating us with latest news 🙂

  2. I actually have TWO client-friends who ON PAPER look like they should qualify for this FHA short-re-fi. So far, however, I have been unable to find any lenders who know anything about it or who are interested in finding out! If you have a NOVA lender who is doing these loans, please let me know!

    Maggi Davis
    Keller Williams Realty
    Virginia Beach, VA

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