The FHA Short Refinance Option is geared toward helping homeowners who are current in their mortgage payments but owe more on that mortgage than the home is worth. Certain restrictions apply, of course. You can read all the details in this RISMedia article or visit hud.gov.
Here are some highlights:
Starting in September, 2010, the FHA will offer certain homeowners in need the opportunity to qualify for a new FHA insured mortgage. The original lender must agree to write off at least 10% of the unpaid principal, the property must be a primary residence, the mortgage must be for more than the property is worth, the homeowner must qualify for the new loan under FHA requirements, including having a credit score of 500 or more.
Contact your lender, consult with a tax advisor and see hud.gov for more information.
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