Approximately 2.2 million Americans have an adjustable-rate mortgage (ARM) that is due to adjust this year. For many homeowners these newly adjusted rates will significantly increase their mortgage payments and lead them into foreclosure. If you are facing foreclosure or believe you will have difficulty paying your mortgage because of an ARM reset then the Federal Housing Administration (FHA) has a new program designed just for you.

The program is called "FHASecure" and it gives homeowners with ARMs and "interest-only" loans the ability to refinance up to 97.75% of their home's appraised value into a FHA-insured mortgage. By refinancing into a FHA-insured mortgage, you can expect to pay lower monthly mortgage payments. Under the FHASecure program the lender will not automatically disqualify you for any late or non-payments on your existing loan. Moreover, the lender can offer you a second mortgage to make up the difference between the value of your property and what you owe.

As long as you are current on your mortgage, you are eligible for an FHASecure refinance. If you are delinquent, the default must have been due to the payment shock of an interest rate reset or, if you have an Option ARM, the "recasting" of the mortgage to fully amortizing. If you are delinquent because of job loss, divorce, medical issues, or any other hardships you should explore your other options. There isn't a limit on how far behind you can be on your mortgage or how many payments you've missed. Whether you're current, one month or multiple payments behind the amount you can refinance will depend on the value of your property and how much you owe and if the lender, or another eligible source, is willing to take back a second mortgage to help bridge the gap between what is owed and your home's value.

If you do not have enough equity in your home to refinance you should speak to your lender about a second mortgage or a "short payoff" to make up the difference. However, these options are at the discretion of the lender. To find out what the value of your home is you should check www.Zillow.com or speak with a local real estate broker about appraising your home.

The FHASecure program may also help those already in foreclosure but each situation is different and is dependent three factors: the value of the home, the amount owed, and if the lender is willing to offer a second mortgage. Homeowners facing foreclosure should first educate themselves and then speak with their lenders or seek counseling from HUD-approved counseling agencies.

Both first and second mortgages can be included in FHASecure so long as the combined amount is within the FHA loan limit. If the combined amount exceeds the FHA loan limit or the loan-to value limit, you should ask the lender for a second mortgage to make up the shortfall.

People will still have to qualify for a FHA insured mortgage, based on their capacity to make the monthly mortgage payments. Unfortunately, those who shouldn't have gotten a home loan in the first place will not be able to qualify for FHASecure or other FHA refinancing options. Fortunately there are other options that will allow them to avoid foreclosure and/or save their credit.

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