FHASECURE

  This Program has been discontinued by HUD effective 12/31/08

Eligibility Highlights of the FHA Secure Initiative 

I. FHASecure Eligibility Criteria

All conventional-to-FHA rate and term refinances are considered FHASecure, regardless of whether the borrower is delinquent or current.  Cash-out refinance transactions are not acceptable under this initiative as borrowers must fit the normal Cash Out guidelines.  The following items are the eligibility criteria for originating mortgages under FHASecure. 

Borrowers Current on Their Mortgages

 ·   The mortgage being refinanced must be a non-FHA fixed rate or adjustable rate mortgage. 

·     Lender must verify the borrower’s mortgage payment history through the current mortgage servicer or through cancelled checks (front and back) to determine if it is acceptable under FHA’s standard underwriting guidelines. 

·    If there is insufficient equity in the home, FHA will insure first mortgages where there is a:

1)      Write Down.  The existing note holder(s) writes off the amount of indebtedness that cannot be refinanced into the FHA insured mortgage (a short pay-off); or 

2)      New Subordinate Financing.  The FHA-approved lender making the new mortgage, the existing note holder or other interested party may take back a second lien by the amount which the payoff is short, including closing costs, arrearages, other reasonable and customary costs that are standard servicing practices and are included in all payoff statements or previous secondary financing if the indebtedness exceeds FHA prescribed LTV and maximum mortgage amount limits; and/or

3)     Re-subordination/Modification.  The note holder(s) of existing subordinate financing must re-subordinate or modify the existing subordinate lien(s) and re-execute at closing if the lien is to remain in effect after closing; and/or

4)      Other options.  State/local programs or “Rescue Funds” administered by nonprofit organizations.

·     Mortgagees must determine that the borrower has sufficient income and resources to make the monthly payments under the new FHA-insured refinancing mortgage as well as pay other recurring obligations.