Government Refinance and Home Purchase Assistance

Information and Updates on Government Mortgage Programs

[Update -- The Fed and Obama administration have been compressing mortgage interest rates for some time now. Due to those efforts and other market factors, mortgage rates and APR's on most 15-30 year fixed government-backed mortgages have recently been coming in between 3.5 and 5.0%. But mortgage interest rates may be moving significantly higher very soon so contact us today to learn more and get the process started.]

HOME PURCHASES

There are several government-backed home purchase programs designed to make it easier for Americans to buy a home. The goal of these programs is to allow for low down payments and to make it easier for people with less than perfect credit to qualify for a mortgage. With mortgage interest rates near historical lows and housing prices increasing across the country again, now is a terrific time to look into buying a home. Fill in the contact form on the right to learn more about the available government-backed purchase programs and to get pre-qualified for a home purchase loan.

HOME REFINANCES

For Homeowners Who Have Equity

There are several superb government-backed refinance programs for borrowers who have even a little equity in their homes and there are various good reasons to seek a refinance:

Contact one of our counselors to be pointed in the right direction on these options.

For Homeowners Who Are Underwater Or Upside Down On Their Mortgage(s)

There are several options for the millions of U.S. homeowners who owe more on their home than the property is currently worth. Here are a few:

1. FHA Streamline Refinance — If you are upside-down/underwater on your mortgage and currently have an FHA loan, refinancing to a better FHA mortgage through the FHA streamline program is an excellent option. Fill in the contact form on this page if you have an FHA loan and would like to learn more about the FHA-to-FHA streamline program.

2. HARP Refinances — With President Obama’s HARP program, qualified homeowners can refinance a conventional first mortgage which is backed by Fannie Mae or Freddie Mac no matter how underwater they are. (See here to find out if your conventional mortgage is backed by Fannie or Freddie.) As long as the current Fannie or Freddie loan was acquired prior to May of 2009 there should be no loan-to-value (LTV) limits. Further, while the HARP 1.0 program did not work well for people currently paying mortgage insurance (PMI), the changes in the HARP 2.0 program allow borrowers with PMI to participate. The HARP program does not allow second mortgages to be combined with first mortgages but will allow the first mortgage to be refinanced with the second mortgage remaining in place as is (called a subordination). See here for more on HARP 2.0 guidelines, features, and requirements. Contact us to learn more.

3. VA streamline (IRRRL) Program — For borrowers who have a VA loan now, the VA to VA streamline (also known as the IRRRL program) is a terrific, low cost way to significantly reduce payments and interest rates, even for borrowers who are underwater on their homes. If you have a VA loan contact us to learn more about the IRRRL program.

4. Loan Modification Programs — If you are unable to qualify for any other refinance program or if you are delinquent on your mortgage payments and are on the verge of foreclosing your best bet is often to seek a loan modification from your current lender. Loan modifications normally reduce mortgage payments by lowering interest rates or extending the loan period. Obama’s new “Home Affordable Modification Program” (HAMP) gives lenders incentive to modify troubled loans as well. See this page or contact us in the sidebar if you would like to discuss strategies for seeking a loan modification.

5. Principal Reduction Programs — It is possible to get a principal reduction in some rare cases. Contact us to be pointed in the right direction on that.

6. Other Alternatives — In some cases seeking bankruptcy protection is the best option for a family when it comes to saving their home and getting back on their feet financially. Contact us at this page to learn more about that process. Or see this page for ideas on dealing with credit card debts.

Be sure to bookmark this site and check back for the latest updates on government-backed efforts focused on alleviating the housing crisis in the US (see stories below). To contact us about your options just fill in the contact form in the sidebar.

______________________________________________________________________________________________________

LATEST GOVT-RELATED MORTGAGE NEWS:

Filed under Government Home Purchase Programs

Of the four main government-backed home purchase programs, the Fannie Mae program requires the biggest down payment, with a down payment requirement of at least 5%. In addition, the Fannie Mae program has stricter debt-to-income ratio requirements as well as higher credit score requirements than some of the other programs. Despite all of this, the Fannie Mae program remains a popular choice for those who can qualify for it for a couple of reasons:

1. No up front fees: The VA charges a 2-3% up front fee, the USDA rural housing program charges 2% up front, and the FHA charges a 1.75% up from mortgage insurance premium. With the Fannie Mae program there is no up front fee and that saves buyers thousands of dollars in many cases.

2. Temporary mortgage insurance: With the FHA and USDA the mortgage insurance (or equivalent thereof in the case of USDA loans) is set for the life of the loan. With the Fannie Mae (conventional) program the mortgage insurance (sometimes call PMI) can be dropped when you have 22% equity in the home. And when a 20% down payment is used there is no mortgage insurance requirement at all.

Not everyone has the income, credit scores, or down payment needed to qualify for a Fannie Mae home purchase loan. For the folks who don’t, the VA, FHA, or USDA programs are excellent choices. But for folks who can qualify for a Fannie Mae loan, it can be the best choice.

Contact us in on our home purchase page to learn more about the Fannie Mae home purchase program as well as the other home purchase options.

Comments (0) Posted on Monday, April 14th, 2014


Filed under Government Home Purchase Programs

On the surface, you might think the FHA home purchase program has some things going against it. FHA loans require a 1.75% up front fee rolled in to the loan and FHA loans include monthly mortgage insurance for the life of the loan as well. But there several tremendous advantages of the FHA program that keep it very popular.

1. Lenient credit requirements: While a minimum credit score of 620 is needed in most cases, the FHA is significantly more lenient on past credit blemishes than any of the other programs out there. The wait period after a chapter 13 bankruptcy in just 12 months and for chapter 7 bankruptcy it is just two years. The wait period after a foreclosure or short sale is just 3 years. And with FHA loans, while some outstanding collections must be paid off the FHA tends to allow medical collections to remain unsettled.

2. Less strict debt to income requirements: While the USDA and Fannie/Freddie purchase programs have very strict debt to income requirements, the FHA (and VA) programs tend to allow the ratios to stretch higher.

3. Lower and easier down payment requirements: The FHA only requires a 3.5% down payment. The minimum down payment for the Fannie/Freddie programs is 5%. Further, the FHA allows the 3.5% down payment to be given as a gift from family members. Other programs tend to be more strict about the down payment money coming from the borrower.

4. The FHA program is available to all: The VA program is only available to eligible military veterans and USDA rural housing program only applies to eligible areas considered sufficiently rural. While there are FHA restrictions on some condo complexes, the FHA program works on all single family homes in the US.

To learn more about the available government home purchase programs, including the FHA program, contact us on our home purchase page today.

Comments (0) Posted on Saturday, April 5th, 2014


Filed under Government Home Purchase Programs

There are two primary ways to buy a home with zero money down in 2014. The first is to be a military veteran and utilize the VA loan program. The second is to utilize the USDA Rural Housing Program.

The USDA loan program is designed to encourage people to spread out and buy a home out of the more densely populated urban areas. With the name “rural” in the title you might assume that this program only applies to homes way out in the country but that is not true. In many cases, suburbs just on the outskirts out of a city are eligible for the rural housing program. Click here to go to the USDA site and see a map of eligible areas.

Advantages of the USDA Rural Housing Home Purchase Program

  • Requires no money down
  • The monthly mortgage insurance is much smaller than FHA mortgage insurance

Requirements of the USDA Rural Housing Program

  • Home must be in an eligible area
  • Combined gross annual income of all household members normally must not exceed about $90,000
  • Normally requires relatively good credit with few or no collections or similar blemishes on the credit history
  • The USDA requires 2% funding fee up front that is rolled into the loan

Conclusion

In cases where the USDA rural housing program is an option, it is usually a more desirable programs than the FHA or Fannie/Freddie programs. It allows for a 30 year fixed loan with no money down and minimal mortgage insurance. Contact us in the form on our home purchase page for more guidance on getting qualified for a USDA rural housing home purchase loan.

Comments (0) Posted on Saturday, March 22nd, 2014


Filed under Government Mortgage Financing Programs News

Russia’s recent aggression toward its neighbor, Ukraine, sent financial markets reeling in recent weeks. That market instability has affected mortgage interest rates as well. Rates initially dipped as fears of a war sent investors rushing to bonds rather than stocks. But as the situation settled down the stock market surged again and they temporary dip in interest rates passed.

Long term, it is safe to assume that mortgage interest rates will move higher in 2014 and 2015. But for now rates remain relatively low. Contact us today if you are researching a refinance or a home purchase. There is no telling how long mortgage rates will remain at current levels before moving higher.

Comments (0) Posted on Monday, March 10th, 2014


Filed under Government Home Purchase Programs

Spring officially begins in March and the spring season is traditionally a time when more families begin listing their homes for sale. The better weather along with the approaching end of the school year makes springtime a popular time for families to list a home for sale. That means spring is the best time of the year to find homes for sale all across America.

If you have considered purchasing a home, contact us in the form on our home purchase page right away. We can help point you in the right direction regarding the available government home purchase programs. With any luck you could get pre-qualified for a mortgage and start your house hunting process right away.

Comments (0) Posted on Saturday, February 22nd, 2014


Filed under Government Mortgage Financing Programs News

Can you buy a home with no money down in 2014? The simple answer is, yes. However there are caveats.

See our Home Purchase page here for an overview of the various government home purchase programs. The two main ways to buy a home with no money down in 2014 are:

    1) Utilize the VA mortgage program
    2) Go with the USDA rural housing program

In order to get a VA loan you have to be a military veteran with VA eligibility. The rural housing program is available to anyone, but you have to be willing to by a home that somewhat removed from the city. (See here for the USDA’s map of eligible areas).

Most everyone else will need to have a down payment of at leat 3.5% of the purchase price to qualify for an FHA loan and 5% for a conventional loan. The FHA allows that 3.5% to be a gift from family or friends but with conventional loan the 5% needs to be your own savings.

So while there are some good no money down programs available, those programs aren’t for everyone. In many cases at least a small down payment will still be necessary.

If you are interested in buying a home contact us in the form on this page today to learn more or to get help pre-qualifying.

Comments (0) Posted on Tuesday, February 11th, 2014


Filed under Government Mortgage Financing Programs News

There was an interesting segment that aired on Yahoo Finance recently. The basic point was that there are many Americans who have never refinanced at all and as a result are paying too much in interest on their mortgages. If you know someone who has never refinanced or who has an interest rate that is too high have them contact us right away to see if they are wasting money on a mortgage that it too expensive.

Here is that clip:

Comments (0) Posted on Monday, February 10th, 2014


Filed under Government Home Purchase Programs

While there are some government programs the allow for zero money down on home purchases, those programs don’t work for everyone. As a result, most home buyers need at least a 3.5% down payment to purchase a home. This time of year it is common for families to use a tax refund as part of their their down payment funds. The timing of tax refund checks aligns nicely with the start of spring, when there is traditionally an increase of homes being put up for sale.

See our home purchase page for more information on the various government-backed home purchase programs. If you have been worried about not having enough of a down payment to qualify for a home purchase, this is a good time of year to get qualified as tax refunds come in. Contact us on that home purchase page to learn more.

Comments (0) Posted on Saturday, February 8th, 2014


Filed under Government Mortgage Financing Programs News

After a long march upward, the US stock market has been taking a beating in the last week or so. The Dow Jones Industrial Average is down nearly 800 points for its high point at the end of December. The other indexes are seeing similar sell offs over the last ten days.

While the stock sell-off is not great news for the portfolios of investors, it has been good news for mortgage interest rates. As investors pull money out of stocks they tend to invest money in other places like mortgage backed securities and bonds. That inflow of money leads to lower mortgage interest rates. And as expected, mortgage interest rates have been drifting lower in the last week.

Odds are that mortgage interest rates will move significantly higher over the course of 2014, but there will be dips along the way. We are entering one of those dips right now so if you have considered looking in to refinancing your mortgage or buying a home, contact us right away. There is no telling how long this dip in rates will last or if we will see a dip in rates like this again.

Comments (1) Posted on Thursday, January 30th, 2014


Filed under Government Mortgage Financing Programs News

As we enter 2014 we also enter a new phase of mortgage regulations. Several new rules designed to prevent another housing bubble from emerging are set to take effect this week. For borrowers, the new rules will mostly mean that it will be a little harder to qualify for large loan amounts. The most substantial change for borrowers is a tightening of debt-to-income ratio limits on conventional (Fannie and Freddie) mortgages. There is now a fixed 43% debt-to-income ratio cap on conventional mortgages that cannot be exceeded. That means all of a borrowers monthly debt payments, including the mortgage, should not exceed 43% of gross monthly income. For middle class families this could have an impact on the amount they can borrow to purchase a home or to refinance.

Of course there is wisdom in keeping DTI ratios low, but in some cases it helps to have more wiggle room with DTI. The good news is there are alternatives to conventional mortgages though. The new debt-to-income ratios don’t apply to FHA or VA loans for instance. Plus there are other alternatives that can be investigated on a case by case basis.

Contact us today to learn more and see which government refinance or home purchase programs best fit your situation.

Comments (0) Posted on Tuesday, January 7th, 2014


Filed under Government Mortgage Financing Programs News

There was good news this week from the new director of the Federal Housing Finance Agency (FHFA), Mel Watt. Fannie Mae and Freddie Mac were schedule raise their fees at the start of 2014 and those fee hikes would have resulted directly in higher interest rates. Mr. Watt announced this week that he was putting a hold on those scheduled fee increases for at least six months to give him and his department more time to analyze the consequences of such a hike.

Here is what Watt said on the matter:

“Upon being sworn in as Director of the Federal Housing Finance Agency, I intend to announce that the FHFA will delay implementation of the g-fee and risk-based pricing plan announced in the FHFA’s news release dated December 9, 2013 (and detailed more fully in the Loan-Level Price Adjustment Matrix released earlier this week) until such time as I have had the opportunity to evaluate fully the rationale for the plan and the plan’s likely impact on the GSE’s risk exposure, the cost and availability of credit and how the plan would interface with the qualified mortgage standards.”

Anything that prevents rate hikes is good news to borrowers. Contact us today to get more information on available programs.

Comments (0) Posted on Monday, December 23rd, 2013


Filed under Government Mortgage Financing Programs News

Recent reports have shown that the values of homes in nearly all U.S. markets continue to increase. In some hard hit markets values are up more than 50% over the lows they hit in recent years. In most every market housing values have been steadily increasing.

Increasing housing prices open several options for homeowners and perspective homeowners:

Refinancing to remove mortgage insurance (PMI) — A large percentage of American homeowners purchased their homes with less than a 20% downpayment. That means those homeowners are paying a monthly mortgage insurance fee. For instance, FHA loans include mortgage insurance. When a home increases in value it opens the possibility of refinancing to a new loan with no mortgage insurance. Contact us to get an estimate on the current value of your home to see if removing your monthly PMI is possible.

Cash out refinances — As values of homes increase, the possibility of getting cash out refinances returns. For families who owe quite a bit less than their home is worth, a cash out refinance can be a terrific way tap into the equity of a home. And with rates still historically low, cash out refinances make sense for a lot of families.

Home purchases — As we have discussed in the past, increasing home prices are generally a good thing for families considering buying a home. When home prices are increasing, the home you buy this year should be worth more in the years to come.

Contact us in the form in the sidebar today to learn more about the options available to you. Now is an excellent time to start while mortgage interest rates are still hovering near historic lows.

Comments (0) Posted on Friday, December 20th, 2013