Cosmic Cow Pie: Connecting the Dots


More options for the underwater homeowner: FHA Short Refinance to responsible homeowners

Great news for some underwater homeowners.  New FHA loans available if you qualify!

This program is not going to work for people with loans totally submerged owing 100k or more over the current value but if you are not completely under water this is a great opportunity! 

Thanks Anna Kruchten for this current information to help homeowners!

More options for the underwater homeowner: FHA Short Refinance to responsible homeowners

Owe more on your home than it's worth AND you're current on your existing mortgage?

FHA considers you as a responsible homeowner, and they're rewarding you for it.

Keep your home afloat.If eligible, you now have additional refinancing options to help keep your home afloat.

It was announced this past Friday, August 6, that responsible homeowners who owe more on their mortgage than the value of their home could qualify for Federal Housing Administration’s Short Refinance option.

“Starting September 7, 2010, FHA will offer certain ‘underwater’ non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least ten percent of the unpaid principal balance of the first mortgage the opportunity to qualify for a new FHA-insured mortgage.”

This program is aimed to help FHA’s efforts to stabilize housing markets through offering 3 to 4 million ‘underwater’ homeowners a second chance through the end of 2012.

To be eligible…
FHA's Short Refinance option

  • The homeowner must qualify for the new loan under standard FHA underwriting requirements & have a credit score equal to or greater than 500.
  • The homeowner must owe more on his/her mortgage than their home is worth.
  • The homeowner must be current on his/her existing mortgage. The property must be the homeowner’s primary residence.
  • The borrower’s existing first lien holder must agree to write off at least 10% of their unpaid principal balance, bringing that borrower's combined loan-to-value ratio to no greater than 115%.
  • The existing loan to be refinanced must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75%.

Lenders, want to know if you’re eligible?

Participation is completely voluntary. Read FHA’s mortgagee letter for more information. 



If you're thinking of selling your Phoenix-area home, please give us a call. We're here to help you and make the selling process simple and stress free.

Call us today to request your complimentary market analysis to determine how your home compares to others in your area.

Feel free to contact me by phone 602-380-4886 or Email Anna Banana

You can also visit our website for more information on Phoenix and the surrounding areas.


The Masters Series

Anna "Banana" Kruchten was recently chosen as one of 12 Masters of Real Estate by the National Association of REALTORS® at ‘Banana’ has a knack for using unique strategies to market her properties, gain new clients & train her agents how to build a successful real estate practice.

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Cosmic Cow Pie

Carra Riley

Comment balloon 6 commentsCarra & Shae Riley • August 10 2010 08:11PM


Carra - thanks for passing along Anna's post. Ididn't see it, and this is great information for some homeowers. Nice to see a few things being done to help those in need.


Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (Solutions Real Estate ) about 9 years ago

Hi Cara,

Ditto on the thanks, I missed it the first time around myself.

I do have a question on the last bullet point, it's a little confusing. It cannot be a FHA loan I get that, but then "and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75%."

Assuming the existing lender agress to a 10% payoff reduction, does the FHA refi then require a downpayment from the borrower? Not quite sure I understand the process/program.

Posted by Lynda Eisenmann, Broker-Owner,CRS,CDPE,GRI,SRES, Brea,CA, Orange Co (Preferred Home Brokers) about 9 years ago

Thanks, Carra.  I try to keep up with all my subscriptions and Anna is one of them.  But, I would have missed this.  I am with Lynda.  I must be missing something.  I didn't quite understand it all either.  But, perhaps we should be asking Anna. 

Posted by Don Sabinske, Sabinske & Associates Inc. (Don Sabinske, Sabinske & Associates Inc.) about 9 years ago

Great reblog!   I am finding the new FHA stuff a little confusing, also, but hope by September 7 I will be well versed in it!

Posted by Dagny Eason, Fairfield County CT, CDPE Homes For Sale and Condo (Dagny's Real Estate) about 9 years ago

Carra ~ thanks for the re-blog.  That was some information that I did not know all the specifics to.

Posted by Dawn A Fabiszak, The Dawn of a New Real Estate Experience! (Private Label Realty ( Denver metro area, Colorado) about 9 years ago

Jeff ~  Helping America KEEP their homes is a wonderful concept!

Lynda ~  I think after the 10 % write off.. there has to still bed a 97% LTV situation.. but when you read the 2nd from the bottom at 115%.. it is confusing.. probably a good lender question who is dealing with these refi's... Good question.

Don ~  Anna or your favorite lender who will be helping your sellers.

Dagny ~  it is ever changing.. now the MIP is going to increase the monthly payments about $50.00 per month.. they need to refill the pools of money from all the defaults.

Dawn~  That is what I love about AR.. we are all helping one another and keeping up on the market changes.. thanks.

Posted by Carra & Shae Riley, Helping people Transition at all ages! (Brokers Guild Cherry Creek Ltd) about 9 years ago