FHA Refinance Mortgagee letter 12-5

FHA Refinance Mortgagee letter 12-5

FHA Refinance Mortgagee letter 12-5

03/13/2012

FHA has made enhancements to their FHA refinance program for borrowers in negative equity positions.

Previously borrowers in negative equity positions have been allowed to fha refinance into an fha loan by having their existing mortgage company write off part of their existing non fha home loan.

The FHA program enhancements are:

  1. a Short Refinance Trial Payment Plan
  2. First Lien Holders’ option to extinguish the 2nd lien debt
  3. An increase of the allowable housing debt -to-income (DTI) ratio to 35% provided the back-end DTI ratio does not exceed 48%
  4. an extension of the expiration date of the program to Dec 31 2014

If you are in a conventional loan with negative equity give me a call and we can look into if refinancing into an FHA loan would be a good fit for you.

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