FHA Loan Modification Requirements
HUD announced another FHA loan modification plan and they reported new FHA guidelines for loan relief and FHA requirements for their new mortgage modification efforts for conventional mortgages. In 2007 FHA rolled out FHASecure to offer mortgage relief for delinquent homeowner who were not able to qualify for a conforming mortgage refinancing. In 2008, FHA rolled out a revised FHA refinance program to stem foreclosures with Hope for Homeowners.
FHA announced their new loan modification program that was announced help struggling homeowners in the United States.
o The FHA loan is refinanced and 30% of the FHA loan is placed into an interest-free second mortgage that must be paid back when the property is sold or refinanced.
o Homeowners must qualify with ratios of 31/55. The 1st ratio says that up to 31% of the individual’s monthly income can be used for housing costs and that 55% can be used for housing costs plus other monthly debts.
o The borrowers must be able to document a hardship (ie. an income change, loss of employment etc.) and HUD must be considered as a long term hardship.
Read the original article online > FHA Loan Modification Program.
