fha secureIf you are a homeowner that fell for an Adjustable Rate Mortgage plan and now find yourself in dire financial distress because the mortgage reset has left you strapped for cash, the Federal Housing Administration has come to your rescue with a plan called FHA Secure.  If you meet the FHA’s buyer criteria, you may qualify for an FHA secure refinance to get out from under the financial burden of the ARM reset.

For those of you that may have been sleeping for the past year, it has been the repackaging of the ARMs into collateralized debt obligations (CDOs), a type of asset-backed security and structured credit product that has caused the housing market to crash and the economy to go into the tank.  CDO’s have been used for a long time in the finance industry, but they are not regulated as to content and are considered a high risk if there is any problem with the particular asset that is used for the security.

So you do not contribute to the growing economic problem that default brings, the FHA Secure program can get you into an affordable fixed rate loan so you can keep your house.  The FHA Secure criteria are very straightforward:

  1. A history of on-time mortgage payments before the borrower's teaser rates expired and loans reset;
  2. Interest rates must have or will reset between June 2005 and December 2009;
  3. Three percent cash or equity in the home;
  4. A sustained history of employment; and
  5. Sufficient income to make the mortgage payment.

Additionally, the FHA has implemented a risk-based premium process that matches the borrower's credit profile with the insurance premium they pay - i.e., riskier borrowers pay more. This common-sense, risk-based pricing structure began on January 1, 2008.

The FHA Secure program is a strong process that will help many people that were lead into an ARM rather than a more standard fixed rate loan.  This program especially helps low income and minority homeowners as many of them were more susceptible to get into an ARM.  You can find out more about the FHA Secure program by clicking on the links on this page or you can visit the FHA website.

Wherever you go, you will find that the FHA Secure refinance will not only be helpful to you as a homeowner, but it will help the economy as a whole by making one less home in default.  Each of us can make our contribution to turning the economy around and FHA Secure is a solid contribution from the FHA for the homeowner.