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Mortgage Refinance Assistance Programs Summary

Mortgage Refinance Assistance Programs Summary

    There are multiple refinance assistance programs available to borrowers.  These programs are designed to help borrowers more easily refinance into more affordable mortgages.  Except for the Fannie Mae programs, all of the mortgage assistance programs listed below are backed by the government. Government-backed programs include the FHA and VA Streamline Refinance Programs that allow individuals with FHA and VA mortgages to refinance their mortgages with less paperwork than conventional mortgage refinancings.  The FHA 203(k) Home Loan Program enables borrowers to finance the purchase or refinancing of a home as well as the cost of a significant home rehabilitation project with a single FHA mortgage, eliminating the need for the borrower to obtain a separate construction loan.  The bottom half of the table outlines multiple programs designed to help distressed borrowers refinance an underwater mortgage.  Distressed borrower refinance assistance programs include the Home Affordable Refinance Program 2.0 (HARP 2.0) and Home Affordable Modification Program (HAMP) programs.

    The table below summarizes numerous refinance assistance programs.  Click on the program title to learn more about each program.

  • Government Mortgage Refinance Programs
    FannieMae Refinance Mortgage Program
    • Allows borrowers to refinance existing mortgages that are owned by FannieMae
    • Borrowers can refinance their existing FannieMae mortgage into a new mortgage with a loan-to-value (LTV) ratio up to 97.0%
    • This program helps borrowers who have limited equity in their property refinance their loan into a new, potentially more affordable mortgage
    FHA Streamline Refinance Program
    • The Federal Housing Administration (FHA) offers a streamline refinance program that requires reduced qualification requirements as compared to a traditional mortgage refinance, saving current FHA borrowers time and money
    • The FHA Streamline Refinance Program does not require an appraisal and there is no loan-to-value (LTV) ratio requirement so it is very useful if you are underwater on your mortgage
    • The program does not require borrowers to provide their credit report or verify their income or assets although lenders may have their own borrower qualification requirements
    VA Streamline / IRRRL Refinance Program
    • The Veterans Administration (VA) offers a VA Streamline Refinance Program for eligible VA borrowers that requires limited qualification requirements as compared to a traditional mortgage refinance. The VA streamline refinance program is also known as an IRRRL (Interest Rate Reduction Refinancing Loan) or a "VA to VA" refinance
    • With the VA Streamline Refinance Program, the borrower is not required to provide a property appraisal or credit report. Lenders, however, may apply their own mortgage qualification requirements
    • Except when refinancing an existing VA adjustable rate mortgage (ARM) into a fixed rate mortgage, the VA streamline refinance must result in a lower interest rate. When refinancing from an existing VA ARM mortgage to a fixed rate mortgage, the interest rate may increase
    • The VA Streamline Refinance Program is designed to save VA borrowers money on their refinancing as well as on their new monthly mortgage payments
    USDA Streamline Refinance Program
    • The USDA Streamline Refinance Program enables borrowers to refinance an existing USDA home loan with significantly fewer borrower qualification requirements than a standard mortgage refinance
    • The Program does not require borrowers to obtain a property appraisal report, provide a credit report or meet debt-to-income ratio requirements
    • There is no loan-to-value (LTV) ratio limit which means borrowers who are underwater on their mortgage are eligible
    • By simplifying the refinance process, the USDA Streamline Refinance Program is designed to save eligible borrowers time and money.
    Underwater / Distressed Mortgage Government Refinance Programs
    Home Affordable Refinance Program 2.0 (HARP 2.0)
    • The HARP 2.0 program is designed to help homeowners who are current on their mortgages but whose homes are underwater (the amount of the mortgage is greater than the value of the house) refinance their mortgages
    • If your house is underwater it can be almost impossible to refinance your mortgage without using a government-backed program such as HARP 2.0
    • HARP 2.0 is designed to help borrowers refinance into more affordable, more stable mortgages
    FHFA Principal Reduction Modification Program
    • The program is designed to help eligible, delinquent borrowers become current on their mortgage, reduce their mortgage payment and avoid foreclosure
    • Program features include addressing past due payments, a reduction in interest rate, extending the mortgage term to 40 years and potentially reducing the principal mortgage balance through loan forbearance or forgiveness
    Flex Modification Program
    • The goal of the Flex Modification Program is to help struggling borrowers modify their existing mortgages into more affordable loans
    • The Flex Modification Program targets distressed borrowers who are more than 60 days delinquent on their mortgage or who are in imminent risk of default
    • The program is designed to reduce your monthly mortgage payment by at least 20% so that your total monthly housing expense is no more than 40% of your monthly gross income
    • Eligible borrowers may be able to reduce their mortgage balance by up to 30% using the Flex Modification Program
    • You should contact your current lender to determine if you are eligible for the program
    Home Affordable Modification Program (HAMP)
    • The HAMP Program expired on December 31, 2016 and was replaced by the Flex Modification Program (see above)
    • The HAMP program provides lenders with financial incentives to help distressed borrowers modify their mortgages
    • By modifying your mortgage through the HAMP program you may be able to lower your monthly mortgage payments in order to make them more affordable and sustainable for the long-term
    Principal Reduction Alternative
    • The Principal Reduction Alternative (PRA) was designed to help you by encouraging mortgage servicers and investors to reduce the amount of your mortgage
    • THE PRA program is designed for borrowers who are significantly underwater on their homes
    Second Lien Modification Program (2MP)
    • The Second Lien Modification Program (2MP) is designed to help borrowers that have a home equity loan, HELOC, or some other second mortgage that is making it difficult for them to make their mortgage payments
    • 2MP works in tandem with HAMP to provide comprehensive solutions for homeowners with second mortgages to increase long-term affordability and sustainability
    Home Affordable Foreclosure Alternatives Program (HAFA)
    • The Home Affordable Foreclosure Alternatives (HAFA) program is designed for borrowers that cannot afford their mortgage payments and recognize that it is time for them to transition to more affordable housing
    • Unlike conventional short sales, a HAFA short sale completely releases you from your mortgage debt after selling the property. This means you will no longer be responsible for the amount that falls "short" of the amount you owe on the mortgage. The deficiency is guaranteed to be waived by the mortgage servicer
    FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance)
    • The FHA Short Refinance program is designed for borrowers with FHA-insured mortgages who are not behind on their mortgage payments but whose mortgages are greater than the value of their properties
    • FHA Short Refinance is designed to help homeowners refinance into more affordable, more stable FHA-insured mortgage
    Home Affordable Unemployment Program (UP)
    • If you are unemployed and struggling to pay your monthly mortgage payment, the Home Affordable Unemployment Program (UP) may reduce your mortgage payments to 31% of your monthly gross income or suspend them altogether for 12 months or more
    • To be eligible for the UP program you must be unemployed and eligible for unemployment benefits, occupy the house as your primary residence, have not previously received a HAMP modification and you must have obtained your mortgage on or before January 1, 2009
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