While we are waiting to learn more details from the government and from the banks about HOPE loans (aka FHA short refis), it is worth pointing out that one type of loan can currently be refinanced even when the homeowner is upside down, or in other words, even when the homeowner owes more on the home than the current value. This applies if your current loan is an FHA loan.
The program is called FHA Streamlining and here are the requirements for upside down homeowners or any other current FHA loan holder:
– You must have remained on time with your mortgage payments
– The new loan must be at a lower rate than the old loan
– You cannot take any cash out
See here at the HUD site for more info on FHA Streamlines. The beauty of an FHA to FHA Streamline loan is that there is no credit score requirement and no requirement for an appraisal. That is what makes refinancing possible even when home values in any given area have dropped dramatically.
If you owe more than your home is worth and you have an FHA loan currently contact us today and we’ll see about improving your loan terms.