HUD Expands Terms of Eligibility for the Home Affordable Refinance Program

By: Alicia Schuller, Marketing Coordinator, NHS of Baltimore

Earlier this month U.S. Housing and Urban Development (HUD) announced they are expanding the guidelines under which homeowners may qualify to refinance their mortgages with the Obama Administration’s Home Affordable Refinance Program. Struggling homeowners may now be eligible for refinancing before they are actually delinquent on their mortgages. However, homeowners must be upside down in their mortgage, meaning they owe more than the home is worth, and they must have a loan owned or backed by Fannie Mae or Freddie Mac.

The program’s guidelines have changed significantly from its original stipulations, which required homeowners to be at or below 105% loan to value on their homes. Under the recent changes, homeowners who are as much as 125% underwater will have the option to refinance. According to a press release published on makinghomeaffordable.gov, Shaun Donovan, HUD Secretary, hopes that the changes will make the program more accessible to so many struggling homeowners.

Baltimore residents should take heed to the program’s changes. According to Baltimore Sun Blogger and Reporter, Jamie Smith Hopkins, 29% of Baltimore homeowners currently qualify for the refinancing options under the new guidelines because they owe between 80-125% of their homes’ value. NHS of Baltimore recommends that residents consult with a non-profit housing counselor in order to understand their best options. Read HUD press release.