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More options for the underwater homeowner: FHA Short Refinance to responsible homeowners

Reblogger Steve Moore
Real Estate Broker/Owner with Steve Moore/David Massey Real Estate

Original content by Anna "Banana" Kruchten AZ Broker BR030809000

More options for the underwater homeowner: FHA Short Refinance to responsible homeowners

Owe more on your home than it's worth AND you're current on your existing mortgage?

FHA considers you as a responsible homeowner, and they're rewarding you for it.

Keep your home afloat.If eligible, you now have additional refinancing options to help keep your home afloat.

It was announced this past Friday, August 6, that responsible homeowners who owe more on their mortgage than the value of their home could qualify for Federal Housing Administration’s Short Refinance option.

“Starting September 7, 2010, FHA will offer certain ‘underwater’ non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least ten percent of the unpaid principal balance of the first mortgage the opportunity to qualify for a new FHA-insured mortgage.”

This program is aimed to help FHA’s efforts to stabilize housing markets through offering 3 to 4 million ‘underwater’ homeowners a second chance through the end of 2012.

To be eligible…
FHA's Short Refinance option

  • The homeowner must qualify for the new loan under standard FHA underwriting requirements & have a credit score equal to or greater than 500.
  • The homeowner must owe more on his/her mortgage than their home is worth.
  • The homeowner must be current on his/her existing mortgage. The property must be the homeowner’s primary residence.
  • The borrower’s existing first lien holder must agree to write off at least 10% of their unpaid principal balance, bringing that borrower's combined loan-to-value ratio to no greater than 115%.
  • The existing loan to be refinanced must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75%.

Lenders, want to know if you’re eligible?

Participation is completely voluntary. Read FHA’s mortgagee letter for more information. 



If you're thinking of selling your Phoenix-area home, please give us a call. We're here to help you and make the selling process simple and stress free.

Call us today to request your complimentary market analysis to determine how your home compares to others in your area.

Feel free to contact me by phone 602-380-4886 or Email Anna Banana

You can also visit our website for more information on Phoenix and the surrounding areas.


The Masters Series

Anna "Banana" Kruchten was recently chosen as one of 12 Masters of Real Estate by the National Association of REALTORS® at realtor.org. ‘Banana’ has a knack for using unique strategies to market her properties, gain new clients & train her agents how to build a successful real estate practice.

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Ginger Harper
Coldwell Banker Sea Coast Advantage~ Ginger Harper Real Estate Team - Southport, NC
Your Southport~Oak Island Agent~Brunswick County!

Good to know. Thanks,


Jan 10, 2024 10:43 AM