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Hope for Homeowners Plan
The HOPE for Homeowners (H4H) program was created by Congress to help those at risk of default and foreclosure refinance into more affordable, sustainable loans. H4H is an additional mortgage option designed to keep borrowers in their homes.
The program is effective from October 1, 2008 to September 30, 2011.
As many as 400,000 homeowners could avoid foreclosure through this program over the next three years. If you are having trouble making your mortgage payments, HOPE for Homeowners may be able to help you by refinancing your loan into a new 30-year fixed rate loan with lower payments.
How it works:
Lenders write down loan balance to 90% of current appraised value.
New loan is a 30-year fixed at current rates (about 6.5%).
Borrowers pay 3% up-front insurance premium (can be financed as part of the loan).
Borrowers pay 1.5% a year as insurance premiums (paid as part of their monthly payments).
Housing costs can't exceed 31% pf borrower's income or 38% if borrower successfully completes 3-month trial period.
Total debt can't exceed 43% of borrower's income or 50% after three-month trial.
Second mortgage holders must release their liens.
New loan is guaranteed by FHA.
Who qualifies
Owner-occupants who cannot afford their current loan and do not own a second home.
Borrowers must fully document their income.
Borrowers must agree to share future appreciation in their home.
Lenders write down loan balance to 90% of current appraised value.