Requirements for New FHA-Insured Loans:

___New FHA loans must be properly underwritten and must be based on current appraised value of the house and borrower's documented income (borrowers with higher - but not disqualifying - debt levels would need to make six months of timely payments at the new payment level to qualify for the guarantee);

___New FHA loan must extinguish all existing liens and substantially reduce the borrower's mortgage debt service;

___New FHA loans under this program must be within the FHA loan limits now in effect under the stimulus for the duration of this program;

___Oversight Board will set reasonable limits on loan fees and interest rates; and

___To reduce costs to the government - and avoid inappropriate enrichment to the borrower - the government will retain a share of the borrower's future profits. When the borrower sells the home or refinances the loan, the borrower will pay from any profits the higher of (1) an ongoing exit fee equal to 3 percent of the original FHA loan balance; or (2) a declining percentage of any net proceeds attributable to home appreciation (i.e., from 100 percent in year one to 50 percent in year four and thereafter minus the fees the borrower has paid into FHA).