December 01, 2008

 

In an effort to encourage more lenders and borrowers to participate, HUD Secretary Preston announced November 19 a set of changes HUD is making in the HOPE for Homeowners (H4H) program.  H4H provides mortgage insurance for financially distressed homeowners to help them refinance their existing mortgages.   
 
As described in the below-linked press release, HUD changes include: 
  • Increasing the maximum loan-to-value (LTV) ratio from 90 percent to 96.5 percent of the home’s appraised value for borrowers whose refinanced mortgage payments represent no more than 31 percent of their monthly gross income and whose household debt does not represent more than 43 percent of their income.  The original H4H authorization bill required all H4H loans to have a LTV ratio of 90 percent or less, but Congress recently authorized the H4H Board of Directors to increase the H4H LTV ratio in the Emergency Economic Stabilization Act, H.R. 1424.
  • Extending the maximum mortgage term from 30 to 40 years to reduce monthly payments. 
  • Allowing upfront payments to subordinate lien-holders for released liens.  Before HUD made this change, subordinate lien-holders were eligible for payment only after the home was sold. 
Related Link:  HUD News Release