By Jim Roberts
With a view to help distressed home owners all over the country, including California and its capital city of Sacramento, the federal government has been introducing various beneficial programs. Sacramento region like elsewhere is filled with many home owners in distress, finding their property values below the mortgage loan outstanding in the status of “underwater”. The Federal Housing Administration from now on will permit mortgage lenders to refinance their loans afresh, wherein at least 10% of the original mortgage amount will be forgiven.
The federal government expects somewhere between 500,000 to 1.5 million borrowers to be helped by this new program. A Sacramento Realtor can throw more light on this program and its full details if you approach for guidance. However, here are the broad details as published in the Department of Housing and Urban Development (HUD) site:
As regards eligibility, borrowers can participate voluntarily with the consent of lien holders on their mortgage with the eligibility criteria of – homeowner must be in a negative equity position, that is their home value is less than the mortgage dues; existing mortgage to be refinanced must be current and should not be delinquent; the property is owner occupied as principal residence; standard FHA underwriting requirements will apply; the credit rating FICO based is greater than or equal to 500; the existing loan to be refinanced must not be a FHA-insured loan; and the existing first lien holder must write off at least 10 percent of the unpaid principal of the mortgage loan.
There are other elaborate conditions prescribed such as – the loan-to-mortgage ratio and monthly repayment criteria limit etc. – which can be explained by a Sacramento Realtor.
The Federal Housing Administration is a preferred source of financing, towards buying a selected Sacramento Home for sale from out of Sacramento listings by prospective home buyers. Earlier it was the common belief that only low income and median income group of people will be benefited through FHA-backed loans, since the value of the proposed home was limited.
But thanks to the Economic Stimulus Act of 2008, the position has changed – now the maximum limit for a housing loan has become $729,750. This enables people desirous of buying Sacramento properties from the high-end neighborhoods also to turn to FHA-backed housing loans.
The national statistics go to show that FHA-sponsored home loans have been attractive as evident from the number of applicants has gone up from 2 percent of total home loan applications in the year 2006 to nearly 30 percent in 2010.
What is more you can get assistance for down payment and closing costs as well from non-profit organizations, under the guidance of a Sacramento Realtor.