Get assistance from Federal Housing Administration (FHA) mortgage programs.

A recently signed law created the federal government’s Helping Families Save Their Home Act of 2009. This program expanded the FHA's ability to assist homeowners who are struggling with their monthly payments. The government agency now has an increased ability to use foreclosure prevention, loan modifications, and other loss mitigation tools to assist FHA borrowers. The goal is to help them avoid foreclosure, and the program will focus on those borrowers who are behind on their payments and who are facing an imminent default.

The assistance program is beneficial to both the lenders and the homeowner. Many studies show that offering loss mitigation, loan modifications, and other types of assistance is beneficial to both borrowers and the Federal Housing Administration (FHA) because those services help borrowers keep their homes while also limiting the amount of money the FHA may lose. While the FHA has always focused on helping homeowners, the Helping Families Save Their Home Act is putting an increased focus on that. The program is requiring banks and lenders to establish early contact and communication with delinquent borrowers. They need to discuss the reason for the person missing a payment, and they need to evaluate reinstatement options and how to get the borrower back on track. As a result of the program, now servicers will have additional options and resources to offer those borrowers who seek help before they go delinquent. The earlier this process starts, the greater the likelihood that the borrower will be able to retain their home and prevent a foreclosure.

Am I eligible for Federal Housing Administration (FHA) mortgage assistance

First of all, to be eligible, the FHA defines an FHA borrower facing imminent default as a homeowner who is current or less than 30 days past due on their mortgage obligation.

The borrower must also be experiencing a fairly significant hardship, such as a reduction in income, a medical emergency, or some other type of financial emergency or hardship that will prevent him or her from making their next mortgage payment. This can include a reduction in or loss of household income that was supporting the mortgage loan. A reduction in income may be caused by unemployment, reduced pay,, reduced job hours, or a decline in self-employed business earnings.

 

 

 

Another condition that may make someone eligible for assistance can involve a change in household financial condition, such as a serious or chronic illness, death in family, permanent or short-term disability, or a medical emergency.

Once they are found to be qualified, the assistance provided can include :

Types of mortgage help provided

Several options are available. Effective immediately, the loss mitigation options that are offered by the government, as well as FHA's Home Affordable Modification Program (FHA-HAMP), may be used to assist those borrowers who are facing imminent default on their loan.

• A mortgage forbearance agreement, which is agreement that is put into place by the loan servicer to reduce, postpone, or suspend the mortgage payments that are due on a loan for a limited and specific time period. Click here to learn more on forbearance.
   
• Referrals and access to other government programs can also be provided. The federal government has pledged to help hundreds of thousands of homeowners, and the FHA works closely with those agencies. Learn more.
   
• Other options offered by FHA-HAMP include allowing qualified FHA-insured borrowers to reduce their monthly mortgage payment to an affordable level. This will occur by permanently reducing their payment through the use of a partial claim that will also combined with a loan modification. This solution of a partial claim will defer the repayment of a portion of the mortgage principal through an interest-free subordinate mortgage that will not be due until the first mortgage is paid off. The next step of this process includes the remaining balance of the mortgage then being modified through re-amortization and in some cases, an interest rate reduction. All of these steps will help ensure the homeowner stays out of foreclosure, and ensure they keep their home.
   
• The FHA also offers refinancing that will both help a borrower purchase a home, as well as pay for any repairs or rehabilitation. It is known as the 203(k) loan program. Click here to learn more about this financing option.
   
• Another FHA assistance service will reduce the amount of principal that a homeowner is responsible for paying. Read more on the FHA Short Refinance program.

Contact the FHA or your mortgage servicer for more information.