FHA Refinance Program - H4H Hope for Homeowners

The Federal Housing Administration is doing its part to help alleviate the housing crisis in this country. The Hope for Homeowners (H4H) program offers FHA refinancing options to homeowners with adjustable-rate mortgage (ARM) loans. By helping people refinance into fixed-rate loans with lower interest rates, the FHA hopes to reduce the foreclosure rate in this country.

Find out if you are qualified for this program:

This refinancing program was launched in October of 2008 and will continue until September 2011. Every since the FHA introduced this option, people have been asking us questions about it. So here is everything we know about the FHA refinance program.

How the Refinancing Program Works

First, you would need to contact your current lender to see if you are qualified for the FHA refinance program. They have certain criteria in place (covered below), so you need to find out if you meet these criteria for the program. You could also contact a new lender to see if you are qualified.

The basic criteria for FHA refinancing include the following:

• Your current mortgage loan was originated (started) on or before 1/1/08.
• Your monthly mortgage payments are greater than 31% of your gross monthly income (as of 3/1/08).
  
• You did not intentionally fall behind on your payments.
  
• You have not been convicted of fraud in the past.
  
• You do not own other residential real estate (aside from the home you are in).
  
• You did not falsify your mortgage application in order to get the loan.
  

These are the minimum criteria for eligibility in the FHA refinance / H4H program. There may be other stipulations based on your current financial situation, your lender, etc.

FAQs About the H4H Refinance Loans

Here are some of the most commonly asked questions about FHA refinancing through the Hope for Homeowners program:

What is the purpose of this program?

The primary goal of the H4H program is to help at-risk homeowners (who may be facing foreclosure) to refinance their ARM loans into a more affordable fixed-rate mortgage loan. This will reduce the size of monthly payments for those who participate in the FHA refinancing program.

Are there any costs involved for people who want to apply?

As with any other type of loan, you will have to pay closing costs on your refinance loan through the FHA program. It's possible to roll these costs into the loan, as opposed to paying for them out of pocket. This is a question for your lender, because they will be the ones who determine your closing costs. Get an estimate of these costs up front.

How do I apply?

Talk to your lender about the paperwork they need. It varies from one lender to the next. Among other things, you will need to provide proof of income (such as pay stubs and W-2 forms), in addition to your current mortgage paperwork.

Will I get an adjustable (ARM) loan or a fixed-rate loan?

One of the objectives of the FHA refinance program / Hope for Homeowners is to help people transition from unpredictable ARM loans to fixed-rate loans with a lower interest rate. All of the loans offered through this refinancing option are fixed-rate mortgages with a 30-year term. They are also insured by the Federal Housing Administration (FHA).

Additional Resources

You can find plenty of information online about this Hope for Homeowners program. Here are a couple of websites to start with:

• Overview of FHA home loans
• Lenders participating in the refinance program