In September of 2007, the Federal Housing Administration, or FHA, introduced FHA Secure to help decrease the likelihood of foreclosures resulting from the spike in interest rates for Adjustable Rate Mortgages (ARMs). The FHA designed the program to help people with ARM loans keep their homes even if their interest rates jumped so high that they couldn't afford to continue to make payments on their mortgages. By making this refinancing option on FHA loans available to homeowners with ARMs, the FHA gives you the ability to make your mortgage payments and keep your home.

What Does This FHA Loan Program Do?

FHA Secure is a program that allows homeowners to refinance their homes with FHA insured loans. These FHA loans are specifically geared towards homeowners who have non-FHA adjustable rate mortgage loans (ARMs) and who are current or delinquent on their mortgages. Under this program, a FHA approved lender will not automatically disqualify you when you apply to refinance if you are delinquent on your mortgage. In fact, they may be able to offer you other options to help you make the payments on your loans.

Whom Can Benefit from FHA Secure?

Any homeowner who is current on their ARM and has enough income to make the payments on their loans can apply to refinance with the FHA Secure program. Homeowners who have had trouble making payments on their mortgage loans because of the interest rate reset are also able to apply for a FHA insured loan. Option ARM loan holders who have had their mortgage "recast" to fully amortizing are eligible as well. You can apply for FHA loans even if you already have both a first and second mortgage. The FHA hasn't set any sort of limit on how many payments you may have missed on your mortgage to be able to apply for a FHA Secure refinance. Instead, your refinance amount will depend on your property value, how much you owe on your loans currently, and whether or not a FHA-approved lender is willing to give you a second mortgage to help cover the difference between what you owe on your home and its current value.

Why Choose these FHA Loans?

By refinancing with a FHA Secure loan, you can secure lower monthly mortgage payments. With lower monthly payments on your loans, you can avoid default and enjoy more stability. With a FHA insured mortgage, you will not have to face prepayment penalties, teaser rates, or balloon payments. The FHA requires its lenders to offer FHA loans at market rate with terms up to 30 years. The FHA insured loans are also fully amortized, which means each payment will go towards both your interest and your principal, to ensure that you are actually paying down your loan.

Whether you are already delinquent on your loan or current with the threat of delinquency looming, refinancing your home with FHA loans through FHA Secure will get you back on your feet before you face foreclosure. If there is not enough equity in your home to cover any prepayment penalties that may be attached to your current loans or the refinancing costs, you can ask your FHA approved lender to consider offering you a second mortgage to cover the difference or a short payoff on your existing loans. The FHA has made this program available to help ensure that homeowners stay in their homes and to help maintain the property values by decreasing the number of foreclosures and vacant properties in neighborhoods across the nation.

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