We have talked to many people recently about the new FHA Hope for Homeowners program and how it works.
The objective of the program is to help homeowners who are in a negative-equity (they owe more than the house is now worth) situation and may be in a toxic adjustable rate mortgage, get a fixed rate FHA mortgage loan they can afford.
The key elements of the FHA Hope For Homeowners loan program include (this is not an all-inclusive list):
- Your current mortgage payment must be more than 31% of the your gross monthly income.
- You must not have misrepresented your income on your original loan application.
- You must be able to qualify for a new FHA 30-year fixed rate based upon your current documented income.
- You will be required to share in future home appreciation with the FHA.
- The new FHA mortgage loan will be a maximum of 90% of the home’s current appraised value. All second mortgages or any other liens on the property will need to be extinguished — usually meaning that the 2nd mortgage holders will have to agree to a loss of principal.
- The program is completely voluntary; lenders are not required to participate.
If you think you meet the above criteria and decide to engage us to work with you to get qualified, these are the things that you can expect:
Once you confirm that your current lender is participating in the program, the next step is qualify for your new loan. You will need to have documented income and assets, there is no longer such a thing as “stating your income”. Once we have determined that you can qualify for a new FHA fixed rate loan, we will proceed to the appraisal stage.
You will need to pay for an appraisal on your house which is usually between $350 and $400. You will also need to pay for your credit report which is approximately $25. The appraisal is a very important step in the process since the offer to the current lender is going to be based on the current appraised value of your home.
Upon approval by your current lender for them to accept a short-payoff under the Hope for Homeowners program, we will proceed with the loan as normal on our side.
This process is somewhat case-by-case and is not standardized by any means. Each lender is different and has a different process of getting these approved. The biggest key if you are interested in the Hope for Homeowners program is to not delay finding out if your lender is participating and if you can qualify!
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Thanks for the Information
http://www.easyfha.net/
Hi Tammy,
Have you heard details on if the owner participates in this program and then ends up selling at a loss? The fact sheets on the HUD website only say that no proceeds will be “shared” between HUD and the owner, but what happens if there is a negative equity position.
Furthermore, what’s to prevent people who participate in this program to immediately resell their property and get out of a foreclosure?
– Michael
Hope for homeowners sounds cool but you hit the nail on the head with the voluntary stuff. I called GMAC and got three answers from : that legislation hasnt passed yet to we have other programs and we havent heard from the government yet.
It wasnt well scripted so I advised that they write up a better one.
Basically GMAC is not participating.
So then how would this appear on your credit – wouldn’t the short sale reflect badly – or is the thinking – “who cares I still have my home”?
We are Military going through a divorce and I want to keep the home but have 3 loans on it. 80% of the loan is wells fargo 20% is first usa and the pool loan is Greentree financial. and we owe 245K and one home down the street was same model with pool that was in short sale for 145K and that was 4 mos. ago. Will this program work for me? I need help asap on this.