headerphoto

:::images-3.jpegHOPE for Homeowners (H4H)

HOPE for Homeowners is a resource provided by the Federal Housing Administration (FHA) in efforts to aid struggling homeowners.  Under the program, borrowers having difficulty paying their mortgages may be eligible to refinance into FHA-insured mortgages they can afford.  Borrowers who do not have sufficient income to qualify for the H4H program but are making mortgage payments under a Loan Modification or other workout agreement will receive additional consideration for the program.

Note:  If you have not been making your mortgage payments either because you could no longer afford them, or upon the very poor advice of a third party, you may need to reestablish a monthly payment history (min of 3 months) to be eligible for the H4H program.  This is usually accomplished with a stipulation to modify agreement, trial modification or similar tool.  Please contact us for details.

For borrowers who refinance under HOPE for Homeowners, lenders will be required to “write down” the size of the mortgage to a maximum of 90 percent of the home’s new appraised value.  In many instances, lenders will determine that this reduction in principal will allow them to avoid a costly foreclosure, while helping borrowers stay in their homes.

For more information on the HOPE for Homeowners program, please read below, Call us at (888) 271-9767, or register for the next online webinar on the H4H Program below.



Qualification and Program Guidelines
The H4H program will only offer 30-year fixed rate mortgages – so the borrower’s last payment will be the same as the first payment.  In addition, this program will require that new loans be based on a family’s long-term ability to repay the mortgage.  Only owner-occupants are eligible for FHA-insured mortgages. 

Here are the basic qualification guidelines for the H4H program.  If you are unsure of how to interpret these, please use our online service and you will receive your qualification results via e-mail HERE.

  • H4H is voluntary.  Both lender(s) and borrower(s) must agree to participate.
  • The home is your primary residence, and you have no ownership interest in any other residential property, such as second homes.
  • Your existing mortgage was originated on or before January 1, 2008 and you have made at least six payments.
  • You are not able to pay your existing mortgage without help.
  • As of March 2008, your total monthly mortgage payments due were more than 31 percent of your gross monthly income.
  • You certify that you have not been convicted of fraud in the past 10 years, intentionally defaulted on debts; and did not knowingly or willingly provide material false information to obtain existing mortgage(s).


Program Terms, Rates, Fees
The new mortgage, if approved, will replace all of the current mortgages on your home.  You will not owe any payments, fees or debts on mortgages you now hold.   Loans made under the H4H program will have special restriction.  Following are the general terms:

Loan Amount:  Your new H4H mortgage will be no more than 90% of the new appraised value of your home with your lender essentially reducing the principle balance of your current mortgage to that amount. Your lender may choose not to write down your mortgage, in which case you would not be able to participate in the program.

Equity Sharing:  You must agree to share both the equity created at the beginning of this new mortgage and a portion of any future appreciation in the value of your home.  Here is the schedule for the equity share:

  • During year 1: 100% of the initial equity is paid to FHA

  • During year 2: 90% of the initial equity is paid to FHA

  • During year 3: 80% of the initial equity is paid to FHA

  • During year 4: 70% of the initial equity is paid to FHA

  • During year 5: 60% of the initial equity is paid to FHA

  • After year 5: 50% of the initial equity is paid to FHA

When you sell your home, you will also share with FHA one half (50%) of any appreciation created since the time you took out this loan.  Click HERE for Exibit A, Example of Shared Equity for H4H.

Mortgage Insurance:  In addition to an upfront mortgage insurance payment of 3%, you will pay a 1.5% annual mortgage insurance premium on your outstanding mortgage balance.  This premium will be included in your monthly payments.

Loan Fees:  You will need to pay closing costs on the loan.  You will receive a Good Faith Estimate of these costs.

Interest Rate:  The interest rate for the new mortgage will be based on current market interest rates and will be provided by the lender.

Subordinate Financing:  You cannot take out a second mortgage for the first five years of the loan, except under certain circumstances for emergency repairs.


Frequently Asked Questions

Where Do I apply for the H4H Mortgage?  As of October 22, 2008 we have yet to find lenders who are offering the H4H program.  We understand that this is a frustrating situation for those who have been waiting for help.  While we are waiting for the secondary market to emerge with this new product, we are advising our clients to begin the Loan Modification process as a prelude to the H4H option.  You may do this on your own by contacting your loan servicing company, or utilize a third party service such as helpUmodify.org

I started a Loan Modification with my lender, can I still qualify for the H4H Program?  Yes, in fact if you have been making payments under a loan workout or modification agreement, you will receive additional qualification consideration.  Keep working towards your loan modification and get started with the H4H program Here.

I stopped making my mortgage payments upon the advice of a Loan Workout company.  Can I still apply for the H4H program?  Unfortunately, this very poor advice may disqualify you for the H4H program.  We suggest that you contact us immediately to discuss a plan for getting you back on tack with your lender.  Start Here.

Do I have to pay anything to apply?  There will be closing costs associated with HOPE for Homeowners loans; however, they may not be required to be paid out of pocket by the borrower.  Please consult your lender or a HUD-approved Housing Counselor for more details.

How long will the process take?  Processing time will vary, but usually takes approximately 60 days.

How long is the H4H program available?  The program began on October 1, 2008 and will end on September 30, 2011.

I contacted my lender and they are not participating in this program.  Can I apply with another lender?  Yes, You may apply with any FHA-approved lender who is participating in the program.  HOPE for Homeowners is a voluntary program for both borrowers and existing lenders.  In order to complete a HOPE for Homeowners loan, however, your lender must agree to accept the proceeds of the new loan as payment in full.

My lender has started foreclosure proceedings.  Can I still apply for H4H  Yes, however, time is of the essence.  We suggest you contact us immediately to begin discussions with your lender and seek additional time to complete the process.

Is there an income restriction?  No, but you will need to demonstrate that you have sufficient, steady income to make the new H4H mortgage payments.

I recently filed for bankruptcy.  Am I still able to apply for H4H?  Yes, borrowers in bankruptcy may participate.

I have a first and second mortgage on my home.  Can I still apply for H4H?  Yes, however, all your existing lenders must agree to release the liens against your home.

I am current on my mortgage.  Can I apply for H4H?  Yes.






 


Do-it-Yourself TIP #1

Before contacting your lender to discuss your situation, be prepared to provide them with your family budget.  This includes all of you income and expense in your household.  Your lender will ask you for this information as a means of qualifying you for one of their standard workout solutions.  Be as accurate as you can as overestimating your income or your expenses may cost you an approval.


Do-it-Yourself TIP #2

When communicating with your lender, clearly express your desire and intentions to keep the home.  Do not threaten to walk away from the home.  Lenders want to work with homeowners who truly desire to stay in their homes and are willing to work through their challenges.


Do-it-Yourself TIP #3

While exploring workout solutions with your lender, keep up on your payments as best you can.  Contrary to what you are hearing out there, purposefully withholding mortgage payments as a means of negotiating is bad advice and can cost you the ability to obtain a better mortgage as conditions in the mortgage market improve and other workout solutions become available.


Do-it-Yourself TIP #4

Prepare yourself for a long drawn out fight with your lender, perhaps the fight of your life.  You can expect the process to take upwards of 120 days and possibly having to start over once or twice to achieve the desired results.  Make your workout solution a part time job and dedicate 2 to 3 hours a week doing research and contacting your lender(s).

Do-it-Yourself TIP #5

When presenting your family budget to your lender, your income should be several hundred dollars more than your expenses.  If your numbers are off, rework your family budget so that you can afford your mortgage payments, or reduce excessive / non-documented income.   If you can’t make the numbers work, that is the first indicator that you will not qualify for a loan modification.


Do-it-Yourself TIP #6

Keep your cool and remain professional when communicating with your lender(s).  Dealing with your situation can be a highly emotional experience…  If you find yourself loosing your cool, consider getting a third party involved.  Remember the adage, kill them with kindness.


Do-it-Yourself TIP #7

Look for leverage.  Review all of the documents you received during the mortgage origination process as well as the signing.  Look for hints that your mortgage originator falsified the application such as…  overstating your monthly income, a falsified second job, or the amount of money you had in reserves (savings).  If these numbers are different then what you provided, you may have a case for fraud.


Do-it-Yourself TIP #8

If you have been behind on the mortgage for some time, take inventory and find out exactly how far behind you are.  It’s easy to loose track along the way and the timetable for foreclosure can take you by surprise.  Call your lender and ask them “What month are you due for?”.  For Example, if you are due for July-08 and it is October-08, you are due for July, August, September, and October; 4 Months behind on your payments.