Login   |   Register   |   Friday, November 16, 2018
FHA Loans

FHA loans have been helping people become homeowners since 1934.  It is a federal government program run by the Federal Housing Administration (FHA) - which is part of the Department of Housing and Urban Development (HUD) - that insures the loan, so your lender takes less risk and can offer you a better deal including low down payments, low closing costs and easy credit qualifying.

How To Tell If You Have An FHA Loan

FHA loans generally require a lower down payment than conventional loans, so if you remember putting between 1% and 6% as a down payment when you bought or refinanced your home, there is a good chance that you have an FHA loan.

But the best way to be certain is to look at the upper right corner of your loan and mortgage documents.  FHA loans have the words “FHA No.” followed by a loan number, such as: FHA No. 411-12345678.  You may also see monthly payments on your mortgage statement listed as “MIP,” which is the monthly “Mortgage Insurance Premium” that you pay to the federal government through your mortgage lender. 

I Missed A Mortgage Payment.  What Are My Options With An FHA Loan?

FHA loans are governed by HUD regulations which give you additional options not available to borrowers with conventional mortgages.  In some circumstances, you have the option of meeting with your lender face-to-face to resolve the delinquency.  The meeting is a time for you to review your mortgage paperwork with a bank representative and determine whether there are any options to resolve the delinquency and allow you to stay in your home. 

It is very important to open and read your mail.  If your lender offers to meet with you, you should accept that opportunity.  In fact, if you haven’t heard from your lender, request a face-to-face meeting yourself.  The sooner you meet with your lender to resolve the problem, the easier it will be to fix.  There is an embarrassment factor for the homeowner who is behind on the mortgage, but don't let that prevent you from meeting with the bank.  Bank personnel deal with this problem all the time and there are special programs specifically for homeowners in this situation.  The bank looses money if it has to foreclose, so fixing the problem is in everyone's best interest.


The available programs and options to help a homeowner avoid foreclosure are handled by the bank's loss mitigation department.  It is called "loss mitigation" because their job is to minimize the loss to the bank by preventing the house from going into foreclosure.  Below are some of the FHA specific programs to help homeowners who have delinquent mortgages.

 
  • Partial Claim:  If you qualify for a partial claim, the federal government will pay the mortgage lender to bring you current on the loan.  The amount the government pays the lender is added as a second mortgage on your home.  You are not required to make monthly payments on this second mortgage, but you do have to pay it back at the end of the original loan or if you sell or refinance your home.

  • FHA-HAMP FHA Home Affordable Modification Program (HAMP) is a special FHA loan modification program that can significantly reduce your monthly mortgage payments making them much more affordable.  The rules for FHA-HAMP modification are complicated and qualifying depends on your specific circumstances.  Consider contacting a housing counselor for assistance in applying and qualifying for this program.

  • Renting Your Home:  Under certain limited circumstances you may have the option to stay in your home after foreclosure by paying rent to HUD.  Only a small number of borrowers will qualify for this program.  Contact a housing counselor or HUD's National Servicing Center (NSC) if you are interested in this option and believe you may qualify.  The goal of HUD's National Servicing Center is to work with FHA homeowners and their lenders to find creative solutions to avoid foreclosure.

Remember as with any mortgage loan, your first step should be to contact your lender and a local HUD certified housing counselor.  But if your lender is not working with you properly to resolve the problem with your FHA loan, you should report the matter to HUD.

          U.S. Department of Housing and Urban Development
          National Servicing Center 
          301 NW 6th Street, Suite 200
          Oklahoma City, OK 73102

          (877) 622-8525

 

_______________________________________________________________________________________________
This website provides general legal information and not legal advice.  The law is complex and changes frequently. 
Before you apply any general legal information to a particular situation, consult an attorney. 
If you cannot afford an attorney call 1-866-Law-Ohio (1-866-529-6446) or visit OhioLegalServices.org for your closest legal aid office.

_______________________________________________________________________________________________