Refinance With New FHA Government Loan Programs

As of August 2007 the Bush Administration passed legislation that allows the Federal Housing Administration FHA to help some homeowners who may be struggling with their current mortgage payment refinance into an FHA government backed loan.

FHA does not lend money, it provides lender protection through mortgage insurance in case a borrower defaults on their loan.

Unfortunately the new changes to FHA will not help everyone, most of the people who will be eligible for the refinancing programs will be people who haven't yet started to miss or become late with their mortgage payments.

From my experience dealing with struggling homeowners daily this is going to eliminate alot of people.

This is what many critics of the plan have said already.

There are guidelines that must be met in order to stand a chance of refinancing into a FHA fixed rate loan.

All loans must be full documentation so you have to be able to show 2 years of income with proof, W2's, tax returns,paystubs. If you have not yet begun to miss your mortgage payments but fear that you may if your rate and payment go up any further then you may qualify.

There may be exceptions made for people who have had late payments due to the interest rate increasing if you can prove that prior to the increased rate and payments that your payments were made on time.

If you are currently in a Chapter 13 bankruptcy plan and have been in the plan for at least 1 year with payments made on time to the Trustee and Bank you may qualify. Despite some drawbacks to FHA, right now FHA is the best and quite frankly, only option for people with less than perfect credit.

Considering the fact that FHA loans allow you to get the same type of 30 year fixed rate that someone with excellent credit can get is more than enough reason to investigate whether you can refinance into an FHA loan.
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Refinance With New FHA Government Loan Programs