Homeowners who are having trouble making their mortgage payments and risking foreclosure have something to hope for congress recently passed the H4H or Hope for Homeowners program opening opportunities for homeowners to refinance their loans with a more affordable interest rate. This is another tool the government has put into place in an effort to aid distressed homeowners.

Although Federal officials strongly caution that modifications and changes to the criteria can crop up almost daily to the more than 700 page package reform that was effective October 1, 2008, the program is definitely worth the time it takes to research.

Here is an overview of the criteria:

• The loan amount may not exceed a maximum of $550,440
• The new mortgage will be no more than 90% of the new appraised value
• The Upfront Mortgage Insurance Premium is 3% and the Annual Mortgage Insurance Premium is 1.5%
• The holders of existing mortgage liens must waive all prepayment penalties and late payment fees
• Your current mortgage company must accept the proceeds of the HOPE for Homeowners loan as full settlement of all outstanding indebtedness
• Existing subordinate lenders must release their outstanding mortgage liens
• All Standard FHA policies regarding closing costs apply
• The borrower must agree to share with FHA both the equity created at the beginning of this new mortgage and any future appreciation in the value of the home
• The borrower cannot take out a second mortgage for the first five years of the loan, except under certain circumstances for emergency repairs

If the home is sold or refinanced, the homeowner will share the equity with FHA on a sliding scale ranging from a 100 percent FHA share after the first year to a minimum of 50 percent after five years. The lien holder that previously held the highest priority will receive payment up to a proportion of its original interest, not to exceed the amount of available appreciation. This type of delayed payoff will take place until all prior lien holders are satisfied or the amount of available appreciation is exhausted. All remaining appreciation is remitted to FHA. The staff at casanuevaguide.com strongly recommends that you visit with a local non-profit home buyers resource and ask the counselors to review the guidelines with you; you can also visit FHA for additional information.

Have questions about financing and getting approved? We can help, just ask.