Making Homes Affordable Program Expanded

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This is a scary similar title to a previous post about the Making Homes Affordable refinance loan program. As previously posted, this refinance program has been extended through the end of June 2012. Now it has been expanded to incorporate existing loans and situations that it previously would not allow. These changes include:

  • Borrowers can be removed from existing loan: prior to the expansion, if two borrowers were on the existing loan, then both needed to be on the new loan. This posed a problem if changes occurred with the borrowers. For example, loss of income from one borrower, credit problems for a borrower, a divorce situation, etc. Now a borrower can be removed from the loan so long as the other borrower can prove they have been making the mortgage payment over the last 12 months from their own funds (and no late payments over the last 12 months).
  • A new borrower can be added to the existing loan: as long as the original borrower (or one of the original borrowers) is still on the new loan, and the new borrower qualifies, that person can be added to the new loan. That said, a non-occupant co-borrower is still not allowed.
  • Private Mortgage Insurance can be transferred: This is huge because, previously, loans that had PMI were dead in the water with this deal. Now PMI companies are more open to transfer their existing policies to the new loan. As it has been the entire time, regardless of the new value of the home, if PMI was not on the old loan, it will NOT be on the new one.

The basics of the loan program are the same. Existing loans looking to use this program must have been closed prior to March 1, 2009. Fannie Mae must own the mortgage. There can be no late payments in the last 12 months on the mortgage, and the home can not have been listed for sale on the market in the past six months.

In short, most of the aspects of the program have not changed, but the few parts that have open up new avenues for home owners that previously could not take advantage of this program. If you’ve been told “you don’t qualify” for this program because of PMI or the need to drop/add a borrower, reach out to me. If the property is in Georgia, I’d enjoy the opportunity to walk you through this mortgage process and help you refinance your home!

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