Government Offers Refinancing Option for Underwater Homeowners

The U.S. Department of Housing and Urban Development (HUD) has announced a new refinancing program designed for homeowners who owe more on their mortgage than their home is worth.

The goal of this program is to provide a second chance to homeowners who have been negatively impacted by large declines in their local market home values. While this has not been the case for the Houston real estate market overall, the biggest impact locally could be that it will allow homeowners to sell their principal homes in other hard-hit markets and move to this part of Texas.

The Federal Housing Administration (FHA) Short Refinance option goes into effect September 7th. To qualify, the homeowner must be a non-FHA borrower who is current on their existing mortgage. In addition, the lender must agree to write off ten percent or more of the unpaid principal of the 
first mortgage.

 For the complete HUD news release, visit: http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-173