Comparing HOPE for Homeowners and FHASecure

HOPE for Homeowners (H4H) is the legislative version of FHASecure, a Federal Housing Administration program, where both are intended to assist homeowners facing foreclosure, or those at risk thereof.  FHASecure, according to HUD data, has only assisted a relatively small amount of homeowners in foreclosure or in default.  In response, Congress created HOPE for Homeowners to assist a larger number of homeowners.

HOPE for Homeowners versus FHASecure

HOPE for Homeowners is available for borrowers with any mortgage product, while FHASecure limits product availability.  HOPE for Homeowners also generally has more liberal underwriting criteria, meaning that qualifying for the program would be easier compared to FHASecure.

HOPE for Homeowners limits the maximum loan-to-value (LTV) ratio at 90% for most cases (96.5% is sometimes allowable) which also requires the inclusion of a 3% upfront mortgage insurance premium.  On the other hand, FHASecure uses sliding scale for maximum LTV depending on borrower’s credit.

HOPE for Homeowners does not allow a subordinate lien for the lender to recover any write downs, while FHASecure permits second liens with either immediate repayment or deferred repayment.

HOPE for Homeowners is able to reach higher risk borrowers compared to FHASecure due to the manner in which the loans are funded.  HOPE for Homeowners is available until September 30, 2011 while FHASecure expires on December 31, 2008, with a possibility of extension.

The Winner Is?

Despite the HOPE for Homeowners program having some advantages for those who are facing foreclosure or are finding themselves caught as a victim of the struggling economy, the seemingly more liberal qualification standards for this program do not apply across the board.  It is not possible to quantify the features of each program when you compare HOPE for Homeowners and FHASecure and declare either one as a clear “winner” since each situation is relatively unique to each individual family and property.  We suggest that you contact your lender or find and FHA approved lender to help you sort through the details.

Mortgages and personal finance are complicated issues that should receive expert analysis to provide timely solutions and avoid falling further into despair, especially when facing foreclosure and the ticking time bomb of losing your home.

Tags: FHA, FHASecure, government assistance, HOPE for Homeowners, Refinancing