FHA update

Posted on March 27, 2010. Filed under: Industry News | Tags: , |

FHA is working on a program to allow limited-equity homeowners to refinance using FHA, even if their current loan is not FHA.  Assuming the borrower has at least 3% equity in the property, they could use the FHA loan vehicle to do a short process refinance. 

Many details of this will need to ironed out, such as what to do when the borrower has a second mortage.  The larger issue for me…this program is not due out until the fall.  It is much predicted, and I tend to agree, that we will see mortgage rates rise this year.   The higher rates go, the fewer the number of borrowers that will benefit from this program.  It is too early for opinions but this is something worth following.


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