Who Qualifies for Mortgage Assistance?

WSJOnline has a very useful chart and great article today on who qualifies for the recently announced mortgage rescue plan.

Mortgage Assistance

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Obama’s Homeowner Assistance Plan

CO: Obama signs economic recovery bill in Denver

President Obama was in the Phoenix area today to announce details of the Homeowner Affordability and Stability Plan. I guess the White House considers this area to be near ground zero of the housing bust and hence the area to be most hurting due to the housing downturn.

The plan is to help those who are in genuine need of assistance. The President said, “it will not rescue the unscrupulous or irresponsible and, it will not reward folks who bought homes they knew from the beginning they would never be able to afford.” According to the NYTimes,  “the core of the plan gives banks a financial incentive to reduce many mortgage payments to no more than 31 percent of a borrower’s income.” The Wall Street Journal has a very good summary of the entire bill for those interested.

So who exactly will benefit from this? The White House blog says the exact details of who is eligible will not be announced until March 4. However, the blog does have some answers to key questions, such as for:

Those who owe more than their house is worth:

Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property.   For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify.  The current value of your property will be determined after you apply to refinance.

Those with both a first and second mortgage:

As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan.  Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.

Interst rate and terms of the new mortgage:

The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment.  All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate.

Those who are at risk of losing their homes:

The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current.  By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.

Those who are in immediate danger of losing their homes:

Contact your mortgage servicer or credit counselor.  Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower’s eligibility.  We support this effort.

Read the full post on the White House blog, there’s a ton of information there. It should answer a lot of your questions.

Creative Commons License photo credit: aflcio2008

More Money For Down Payment Assistance Program

I receive a lot of questions on the Home in Five Down Payment Assistance Program. The most popular question is of course regarding the availability of funds for non-targeted areas. Well, if you were waiting for these funds before making your purchase then wait no more. We have some good news today. I received an e-mail this morning that there has been $2,000,000 released for down payment assistance in non-targeted areas.

What does this mean to you then?

This means that money is now available for down payment assistance on properties that are outside the designated targeted zones but inside Maricopa county. Just so everyone is clear here are some quick facts:

  • Borrower must be fully approved for a loan program which allows the use of down payment assistance (such as FHA)
  • Borrower can use funds to purchase anywhere in Maricopa county.
  • The borrower does not need to be a first time home buyer (for these funds).
  • Have a property in escrow, appraised and underwritten – since the money runs out quick.
  • The rate on this program is 6.3% and the assistance is 5% of the purchase price.
  • Funds are disbursed on a first come first serve basis.

This program allows up to 5% down payment assistance.  Funds can be used to pay closing costs as well, it just depends on how you end up structuring the loan with your loan officer.

Just a reminder that these funds are HUGELY popular and go fast, so if you are anywhere close to finding a property…this is a SUPERB time to take the plunge!

Read more on the Home in Five Down Payment Assistance Program.

This site is for informational purposes only. It is not sponsored or in any way affiliated with the government. If you are in need of a mortgage loan, consult with a licensed mortgage professional. All fair housing and equal housing opportunity laws apply when applying for a mortgage or buying a home. Copyright 2012.