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The Federal Government has announced a new plan to help homeowners who owe more than their home is worth.

The program will allow non-FHA loan holders to refinance into an FHA loan, even if the homeowner is “underwater” in their current mortgage.  Like with many government programs, there are a few guidelines and regulations that must followed.  They are:

• The borrower’s existing loan cannot currently be an FHA loan.
• The existing lender must forgive a minimum of 10% of the existing debt.
• Homeowners must contact their current servicer in order to encourage them to voluntarily forgive their debt.
• The homeowner must meet all standard FHA loan guidelines in order to refinance into the 30-year fixed-rate FHA loan.
• The amount of debt on the refinanced primary mortgage cannot be more than 97.75% of the value of the house.  If there are two loans, the combined debt after refinancing cannot be more than 115%.

This program could give many Americans a second chance when it comes to their mortgage.  Talk to a Home Loan Expert today to see how this program could work for you.

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