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What Is the FHA Hope for Homeowners (H4H) Program?


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TERMINOLOGY

The Hope for Homeowners (H4H) program is a loan program that is offered by the FHA in order to provide help for distressed homeowners. It is designed to provide assistance to those that are facing foreclosure. With this loan program, if you are near foreclosure and you are upside down on your loan, you could potentially refinance your loan.

Requirements

In order to qualify for this program, you are going to need to meet certain requirements. First, you have to be living in the property as your primary residence. In fact, you cannot own any other properties at all. If you have rental property or a vacation house, you are not going to be able to qualify for this program.

You are also going to have to prove that you have not been convicted of fraud within the last 10 years. The mortgage on the property has to have been obtained without the use of fraudulent documents as well. You also have to be struggling to meet your monthly mortgage payment requirements. This means that your mortgage payment has to be greater than 31 percent of your gross monthly income. If your mortgage payment is not that high, then you will not be able to get involved with the Hope for Homeowners loan program.

Once you are in a position to sell your property, you are going to have to give the government some of the equity that you have accumulated. You will be required to gift them 50 percent of the equity that you earned from your property. Even though this might seem like a large percentage, it is better than losing your property to foreclosure and not getting anything out of it.

Appraisals

In order to qualify for this loan, you are going to have to have your property appraised. The lender will order an appraisal in order to determine the value and condition of your property. They will use the appraised value to calculate the maximum mortgage that you qualify for.

Max Mortgage

With this program, there is a maximum amount of money that you can borrow. The mortgage can only be a maximum of 93 percent of the value of your house. This means that you cannot get 100 percent financing with this loan program and that you will have to have at least a little bit of equity in your house.

Mortgage Insurance Premiums

When you work with the FHA, you are going to have to make a mortgage insurance premium with your payment every month. This mortgage insurance premium is essentially guaranteeing the loan in case you default on it in the future. You will also be required to pay or finance an upfront mortgage insurance amount as well.The mortgage insurance, taxes and insurance amounts are all added to your monthly payment with a FHA loan.