30 Year Fixed FHA Refinance Rate: for borrowers with Negative Equity

 FHA continues to offer a 30 year fixed FHA refinance rate loan program designed to help “underwater” homeowners who owe more on their loan balance than the property is worth. The program was created to give homeowners a better opportunity to remain in their homes. It is better known as the FHA Short Refinance Program with Negative Equity which has been extended thru December 2016.  To qualify and review the guidelines for this loan, please click the link below.

FHA Short Refinance Program with Negative Equity FHA short refinance negative equity

The purpose of the loan was written to help the homeowner by eliminating 10% of their original first lien debt and eliminate the second lien altogether.  In addition, the program increased the debt to income ratios on a manually written loan.  This would give the borrower a chance to qualify for a 30 year fixed FHA refinance rate provided the lender/investor wrote off the unpaid principal balance of the original first lien mortgage by at least 10% and extinguished the second lien.

FHA policy for this program states the following:  “One eligibility requirement of the Short Refinance program is that the existing first-lien-holder must write off at least ten percent (10%) of the unpaid principal balance of the loan being refinance.  If further reduction to the unpaid principal balance is required bring the Loan-to-Value (LTV) ratio of the new refinance loan down to 97.75%, FHA allows proceeds from government entities and instrumentalities of government to be used.”

To learn more about the 30 year fixed FHA Refinance Program, please follow this link:

FHA Consumer Fact Sheet For FHA Short Refinance.

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