President Bush today announced FHASecure, a new FHA refinance program designed to help trouble homeowners keep their homes.   The new program should provide an option for at least some of those people headed into foreclosure due to interest rate resets and skyrocketing mortgage payments. 

Who will benefit?

Hard to say just yet, but here are five criteria listed on the HUD cite:

To qualify for FHASecure, eligible homeowners must meet the following five criteria:

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
5. Sufficient income to make the mortgage payment

Number 3 in particular interested me.  After all, if a homeowner needs to have 3% equity (or cash) in the home, this lifeboat won’t hold the folks who owe more than their homes are worth.  That will be a key question for many here in Sacramento CA.   I was hoping this might be similar to the old FHA Streamline Refi’s we did years ago.  Value and appraisals were not an issue then and the borrower could refi to a lower rate as long as they had been current on their existing FHA payments.

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