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Hope for Homeowners - H4H Program - do you qualify?
The HOPE for Homeowners (H4H) program was created by Congress to help those at risk of default and foreclosure refinance into more affordable, sustainable loans. The program is effective from October 1, 2008 to September 30, 2011.
Lenders will assess their portfolio and perform a cost-benefit analysis to determine if they will offer this program to struggling homeowners. They (lenders) will take a loss on the diference between the existing loan and the new loan, with is set at 90% of the current appraised value. The lender will charge three (3%) percent upfront mortgage insurance premium and 1.5% annual premium. You must agree to equity and appreciation sharing with the Federal government and you cannot have junior liens against the property unless they are directly related to property maintenance. (No second mortgages.) Following funding of the loan the lender will record –in addition to the typical security instrument and note for the first mortgage – a shared equity note and mortgage (SEM) and a shared appreciation note and mortgage (SAM). These mortgages will be serviced by FHA.
The lender has the option to provide homeowners with an affordable monthly mortgage payment through a loan modification rather than accepting the losses associated with declining property values. The list of lenders is not yet available but will be published here as soon as the names are released.
Upon sale of the property, the homeowner will use their sale proceeds to pay off the H4H mortgage as well as the shared equity and shared appreciation mortgages.
Who will Qualify?
1) The existing mortgage was originated on our before January 1, 2008.
2) Existing mortgage payments as of March 1, 2008 exceeds 31% of the homeowners gross monthly income.
3) The homeowner did not intentionally default.
4) The homeowner does not have an ownership interest in other residential real estate.
5) The homeowner and has not been convicted of fraud in the last 10 years under Federal and state law.
6) The homeowner did not provide materially false information (e.g., lied about income) to obtain the mortgage that is being refinanced into the H4H mortgage.
Lenders will assess their portfolio and perform a cost-benefit analysis to determine if they will offer this program to struggling homeowners. They (lenders) will take a loss on the diference between the existing loan and the new loan, with is set at 90% of the current appraised value. The lender will charge three (3%) percent upfront mortgage insurance premium and 1.5% annual premium. You must agree to equity and appreciation sharing with the Federal government and you cannot have junior liens against the property unless they are directly related to property maintenance. (No second mortgages.) Following funding of the loan the lender will record –in addition to the typical security instrument and note for the first mortgage – a shared equity note and mortgage (SEM) and a shared appreciation note and mortgage (SAM). These mortgages will be serviced by FHA.
The lender has the option to provide homeowners with an affordable monthly mortgage payment through a loan modification rather than accepting the losses associated with declining property values. The list of lenders is not yet available but will be published here as soon as the names are released.
Upon sale of the property, the homeowner will use their sale proceeds to pay off the H4H mortgage as well as the shared equity and shared appreciation mortgages.
Who will Qualify?
1) The existing mortgage was originated on our before January 1, 2008.
2) Existing mortgage payments as of March 1, 2008 exceeds 31% of the homeowners gross monthly income.
3) The homeowner did not intentionally default.
4) The homeowner does not have an ownership interest in other residential real estate.
5) The homeowner and has not been convicted of fraud in the last 10 years under Federal and state law.
6) The homeowner did not provide materially false information (e.g., lied about income) to obtain the mortgage that is being refinanced into the H4H mortgage.
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