FHA Principal Reduction Program – How To Get One Easy And Fast

On 7 September 2010, the FHA short refinance program became effective to help struggling borrowers manage their underwater mortgages (mortgages which are worth more than home’s current value). Even if your mortgage is not FHA insured, you may still consider applying for the FHA principal reduction program. The program however has its own eligibility criteria and processing. If you want to restructure your current mortgage payments to a favorable level, seek assistance from a trustworthy and well-known expert to know how to process an application for the home loan principal reduction program and what are the approval standards.

USLoanz has to its credit a prominent network of mortgage lenders as well as experts who have conducted many researches. We can offer you an objective advice on loan modifications principal reductions plan, second lien modification plan, FHA principal reduction program, etc, so that you can manage your finances effectively.

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A homeowner must owe more on his mortgage than the actual worth of his home to be eligible for principal reduction. He must be current on his existing mortgage. FHA qualification standard also requires borrower to occupy his home as a primary residence.  A borrower is required to have credit score of 500 at least. Current loan to be refinanced must not necessarily be an FHA-insured loan. Moreover, refinanced FHA-insured first mortgage should have a loan-to-value ratio of 97.75%, not above. The program is available throughout the year 2012. A borrower also must be able to fully document his income to qualify for the program.

Participation in the program requires all lien holders’ consent. Furthermore, existing first lien holder should agree to write off at least 10% of remaining principal balance to meet borrower’s combined loan-to-value ratio of not above 115%. The program gives meaningful solutions to distressed homeowners by enabling them to acquire a principal reduction on their underwater mortgages. To encourage lien holders’ participation into the 2nd lien modification program, the U.S. Treasury will provide incentives to them.

Depending on the existing level of unmanageable mortgage payments and interest rates, you may consider applying for different federal mortgage-relief programs such as the Home Affordable Refinance Program, the FHA Streamline Refinance Program, the Home Affordable Modification Program, etc. Each program has its own unique requirements and processing. Hence, it can be very difficult for you choose the right option and get approval. If you are not well-versed with enough information on the subject, you might end up either getting disapproved or obtaining an unaffordable mortgage payment terms. To ensure a suitable mortgage debt relief solution, an expert’s guidance therefore is necessary.

USLoanz serves borrowers regardless of the level of their financial crisis with respect to mortgage payments. It can get you in touch with a well-known advisor who will study your financial situation and will provide you meaningful solutions.