Hi, back in 1982 we purchased our home thru fha 235 program and then in 1991 we refinanced our mtg. and years later took out a home equity loan. Now we only have a small amount left on our mtg and want to refinanced to do work on our house. the problem is that there is still a lien from hud and I have called them and they have no record of this and not sure what to do. I have all the receipts and everything of what we have done with our house but was told today that I would not even be able to sell as that is there. If anyone could help it would be greatly appreciated. Thanks

Hi I hotaling,

I would recommend going up the line with HUD until you can find someone who is willing to help you. If they have no record of any lien, they need to provide a letter of such and stating that the lien needs to be released. I'm sure there must be many others in the ActiveRain forum that have great recommendations as well! Call me if you are still having trouble-I might be able to help you find someone with the expertise to get this done!

I remember it.

While I was struggling to pay a non-subsidized mortgage, my next door neighbor was bragging about his $62 house payment (while he had new furniture, new car, etc. that I couldn't afford). 

The 235 program was a disaster; an expose' into government meddling into private business.  It resulted in thousands of homes being abandoned when the owner would get a raise in pay and the house payment would rise as a result. 

Please, no more government subsidies that are unfair to tax payers and perpetuate dependence on those of us that work hard, save, and buy what we can afford. 

Hi Ken,

I appreciate your candid response! Yes, there were many (like with anything!) that took advantage of the program - not as a stepping-stone to move forward to conventional homeownership, but to take advantage of the subsidy and very low payments, much like those who take advantage of the Welfare system!

I see others now, who qualified for a mortgage last year and would've been fine that now qualify for much less or don't qualify at all! These are people who pay their bills on time, work etc. and had good credit but, when lenders started cutting limits, these people, who had a considerably low debt ratio with their credit, ended up with HIGH RATIOS, rates that sky-rocketed and often-times, these companies would close their accounts inevitably dropping their scores as well!

This program had many loopholes on the other side as well. Contractors would go into blighted homes, do a "cover-up" fix on the properties, get them in the program and those who bought these homes ended up with disasters-some homes that had to be condemned!

I just hope you can see both sides of the story! There are many responsible people out there that deserve home-ownership and this program (if loopholes and stricter guidelines were mandated) start them into the right direction...could possibly absorb some of the many empty foreclosed properties that drop property values down further.

I remember the 235 program. In my South Carolina neighborhood, when they began building the homes in our community, the residents were outraged! Habitat is doing what the 235 program was doing; basing the house payment on your income. We need more programs such as these, this was a good program.

I remeber working 8- hours a week to pay for my house and pay me taxes. My neighbors that had FHA 236 loans were partying all night. I got about 2 to 3 hours of sleep a night. I helped pay for their houses.  I will NEVER forget this. Thanks.

When I got divorced the 235 mortgage we had allowed my children to stay in the same home and in a good school district for about the same cost as moving to a small apartment.  I was grateful for that but nervously watched as my subsidy repayment amount grew larger.  My 235 monthly payment covered the principle and a portion of the interest amount, with the subsidy covering the balance of the interest due. 80's interest rates were high and I could not qualify for refinancing at that time. Instead, I squeezed out every dollar I could to make home improvements; adding a garage, siding, gutters, new windows, new roof, a/c - not partying.  My understanding was that value increasing home improvements would help decrease the subsidy repayment amount due, when I could refinance.

When I was able to qualify for a new mortgage, I couldn't get much information from HUD.  Those I spoke with -- I mean those who would even return my calls - cited unfamiliarity with the older 235 program (I understand changes in the 235 loan program were made after we secured ours in 1981/82) and no one would consider researching repayment information unless I actually secured a financing commitment - tough to get when you don't know the amount you'll need! 

I finally found a mortgage company to help me untangle the mess.  With the government repayment amount required at several thousand dollars more than the original cost of the home, and  with the small principle amount still owing, I ended up with a new mortgage principle of nearly two and a half times the original price of the house -- after making payments for 12 years.  All the improvements I scrimped and saved for had absolutely no affect on what I had to repay the government for the subsidy interest paid.

A significantly lower interest rate makes my current house payment a little more than my previous 235 payment but I have little hope of ever paying off my mortgage.

Based on my experience with "helpful" government loan programs, I say "steer clear"!