FHA Secure Plan this is NOT FHA 100% purchase money.

I have had some clients I've pre-approved to buy homes tell me during my usual follow-up call they were waiting for the FHA Secure plan to roll out in January before they begin shopping for a home.

I'm not sure where they got this misinformation but if you run across buyers with similar beliefs and you'd like to understand the FHASecure Plan; read on.

First of all you might ask; what is it? 

It is the FHA Secure plan, it is for refinance; it lets borrowers with strong credit histories qualify for a refinance when they would otherwise be declined.  Suppose a homeowner's been making his mortgage payment on time prior to having an adjustable rate change.  Then after the change they are having a difficult time staying current with their new higher payment.

How the FHA plans on doing this is with risk-based premiums for mortgage insurance that will match the borrowers credit profile.  The less risk the lower the premium the higher risk borrowers pay more for their FHA mortgage insurance.  This mortgage insurance pricing will begin on January 1, 2008.

How you can answer questions about FHA Secure if a past client calls you about an adjustable rate they may have in their current mortgage.  THING THEY MUST HAVE:

1. A history of on-time mortgage payments before the borrower's teaser rates expired and loans reset.

2. Loan applications must be signed no later than December 31, 2008.

3. Three percent cash or equity in the home.

4. A sustained history of employment, and enough qualifying income.

5. Sufficient income to make the mortgage payment.

Message me if you have any questions. 

Rain