Foreclosure is an issue that affects families, communities, and economic growth. The Federal Housing Finance Agencies (FHFA) offer programs to help struggling borrowers prevent foreclosure by offering mortgage relief and refinancing. In this article, we’ll be discussing how the FHFA program works and what borrowers need to qualify for the program and the assistance that can be offered.
The FHFA was created in 2008 by Congress in order to ensure stability in the housing finance system in the United States. It oversees the two largest providers of residential mortgages, Freddie Mac and Fannie Mae. The FHFA has a comprehensive program designed to help borrowers stay current on their mortgage payments or potentially refinance into a lower-rate loan if it is financially beneficial for them. It also can reduce principal payments on loans if necessary to make them more affordable.
What do Borrowers Need to Qualify?
In order for borrowers to qualify for assistance through FHFA they must meet certain criteria including having a primary residence with a mortgage owned or guaranteed by either Freddie Mac or Fannie Mae and having an unpaid principal balance of less than $729,750 as of January 1st, 2019.
Guidelines for FHFA:
- The loan being refinanced must be owned by Fannie Mae or Freddie Mac
- The refinance must provide a benefit to the borrower, such as a lower rate, payment, or shorter loan term
- An LTV of 95% or greater, and can be more than 100% of the home’s value
- At least 15 months have passed between the original note date and the refinance loan’s note date
- No missed payments in the previous six months
- No more than one missed payment in the previous 12 months
- You can use the program more than once as long as at least 15 months have passed between refinances
- HARP mortgage holders are not eligible
- Homeowners who have had a HARP mortgage, but have since refinanced out of it, are eligible
What Assistance Can Be Offered Under FHFA?
The assistance offered through this program can include reduced interest rates for existing loans, extending loan terms making payments more affordable over time, waiving late fees and penalties which may be preventing tenants from moving forward with payment plans set up previously, forbearance agreements allowing tenants some temporary flexibility when needed most and even reducing principal balances if necessary so that tenants can become current on their mortgages more quickly while decreasing monthly payments even further.
Impact on Communities and The Economy
Not only are these programs beneficial to individuals, but they also have a great impact on communities as a whole. They provide economic benefits nationwide due to increased residential sales activity generated by these programs, including decreased foreclosure inventory. This adds value back into communities where real estate had previously been devalued severely due to homes sitting vacant due large amounts of delinquent mortgages turning into foreclosures. This had negative effects on surrounding property values, increasing crime rate and forcing out education systems from those areas due to lack of revenue from taxes being generated from those properties.
In conclusion, The FHFA program can help many homeowners who are unable to keep up with their mortgage payments due to financial hardships such as foreclosure. The Offer Company is ready to assist those interested in taking advantage of this program and other programs available for homeowners. Our team of knowledgeable professionals are available to answer any questions and provide assistance with the application process. For more information, call us at 602-448-7377. We are here to help you get the relief you need.
The Offer Company
Don’t wait until it’s too late – visit our How to Save Your Home from Foreclosure page for the help and guidance you need.