1. What is the HOPE for Homeowners Program (H4H)?
2. What are the eligibility requirements for the HOPE for Homeowners Program?
3. Are there restrictions or requirements associated with the Hope for Homeowners New Loan?
4. How does the HOPE for Homeowners (H4H) program work?
5. When do I have to pay FHA (HUD) back for the equity share created by the write down and the future appreciation share?
6. Do I submit a loan application directly to FHA (HUD)?
7. Do I have to pay anything to apply?
8. How long will the process take?
9. I contacted my lender and they are not interested in participating in this program. What can I do?
10. My lender has started foreclosure proceedings. Can I still apply?
11. Are there income restrictions?
12. Can you recommend a lender?

What is the HOPE for Homeowners Program (H4H)?
This is a new mortgage assistance program signed into law on July 30, 2008, for borrowers at risk of defaulting on their current loan and going to foreclosure. The HOPE for Homeowners program will refinance mortgages for borrowers who are having difficulty making their payments, but can afford a new loan insured by HUD's Federal Housing Administration (FHA). Both lender(s) and borrower(s) must agree to participate. The HOPE for Homeowners program ends on September 30, 2011. The program is available only to owner occupants and will offer 30-year fixed rate. Call 1 (800) 225-5342 for more information.

What are the eligibility requirements for the HOPE for Homeowners Program?
You are encouraged to contact your lender to determine eligibility, but you may be eligible if, among other factors:

• Your home is your primary residence, and you have no ownership interest in any other residential property, such as second homes.
• Your existing mortgage was originated on or before January 1, 2008, and you have made at least six payments.
• You are not able to pay your existing mortgage without help.
• As of March 2008, your total monthly mortgage payments due were more than 31 percent of your gross monthly income.
• You certify that you have not been convicted of fraud in the past 10 years, intentionally defaulted on debts, and did not knowingly or willingly provide material false information to obtain your existing mortgage(s).
• You must follow FHA's long-standing and strict policy of fully documented income and employment.

Are there restrictions or requirements associated with the Hope for Homeowners New Loan?

• The loan amount may not exceed a maximum of $550,440.
• The new mortgage will be no more than 90 percent of the new appraised value.
• The new HOPE for Homeowners mortgage payment must be at or below 31 percent of the borrower's income.
• The Upfront Mortgage Insurance Premium is 3 percent and the Annual Mortgage Insurance Premium is 1.5 percent.
• The holders of existing mortgage liens must waive all prepayment penalties and late payment fees.
• The existing first mortgage must accept the proceeds of the HOPE for Homeowners loan as full settlement of all outstanding amounts owed.
• Existing subordinate lenders must release their outstanding mortgage liens.
• Standard FHA policy regarding closing costs applies.
• You will not be allowed to take out junior liens against the property unless directly related to property maintenance for a period of five years.

How does the HOPE for Homeowners (H4H) program work?
FHA (HUD) will offer lenders an alternative to foreclosing on borrowers. Lender participation is voluntary and is not mandatory. If the Lender volunteers to participate in this program, they will be required to write-down the outstanding mortgage principal balance to 90 percent of the new value of the property. Your new first mortgage will be no more than 90% of the new appraised value of your home with the lender essentially writing down your current mortgage to that amount.

The lender will disclose to the homeowner a new affordable mortgage based on the current appraised value, and 10 percent equity. The new mortgage, if approved, will replace all of the current mortgages on your home. You will not owe any payments, fees or debts on mortgages you now hold. The interest rate for the new mortgage will be based on current market interest rates and will be provided by the lender. You will be responsible for making your new monthly payments on this new mortgage directly to your lender.

You must also agree to share the 10% equity created by the write-down of the loan with HUD (see example below). Additionally, you must also agree to share 50% of any future appreciation in the value of the property with HUD (see example below).   Back to Top

When do I have to pay FHA (HUD) back for the equity share created by the write down and the future appreciation share?
When the home is sold or refinanced, you will share the equity with HUD on a sliding scale ranging from a 100 percent FHA (HUD) share after the first year to a minimum of 50 percent after five years.

In addition to this equity sharing, you will have to pay any future home price appreciation with HUD. This means that, if your home has gone up in value between the time you receive your FHA mortgage and the time of your home sale (or refinance), you will have to pay 50% of the amount of this increase to HUD (less closing costs and a portion of any improvements you have made). This is a 50/50 split that does not change over time.

Do I submit a loan application directly to FHA (HUD)?
FHA does not accept loan applications. Borrowers seeking help should contact their lender, another FHA-approved lender, or a housing counselor to apply or learn more about their options.

• Contact a local, HUD-approved housing counseling agency at HUD.gov;
• Contact the HOPE NOW Alliance at 1 (888) 995-HOPE; or
• • Call FHA at 1 (800) CALL-FHA.

Do I have to pay anything to apply?
There will be closing costs associated with HOPE for Homeowners loans; however, you may not be required to pay them out of pocket. Please consult your lender or a HUD-approved Housing Counselor for more details.

How long will the process take?
Processing time will vary, but it usually takes approximately 60 days. Please consult your lender when you apply.

I contacted my lender and they are not interested in participating in this program. What can I do?
HUD does not accept loan applications or lend money directly; however, you may apply with any FHA-approved lender who is participating in the program. You may also consult a HUD-approved housing counselor.

My lender has started foreclosure proceedings. Can I still apply?
Yes, however, time is of the essence.

Are there income restrictions?
No, but you will need to demonstrate that you have sufficient, steady income to make the new H4H mortgage payments.              Back to Top

Can you recommend a lender?
A list of participating lenders is located on HUD’s website at http://www.hud.gov. In the section marked "At your service," click on the link "Find a HUD approved Lender in your area."

HOPE for Homeowners
Example of How Equity and Appreciation Are Shared
This is an example of how the equity and appreciation sharing elements of this program work. Keep in mind that this is only one example, and your actual experience will depend on many things, including how much your home increases or decreases in value.

In this example, you and HUD (FHA) share this $20,000 when you sell your home or refinance your loan. Here’s how that $20,000 would be split:
If you sell or refinance:

In addition to the above equity sharing, you will also have to share any future home price appreciation with the FHA. This is a 50/50 split that does not change over time. For example if:

In this example, you would keep half of this, or $25,000. The FHA would also receive half, which is also $25,000.

Again, keep in mind that this is just one example, and your actual experience will vary depending on factors such as: How much your home is worth when you get a new HOPE for Homeowners loan, how long you stay in your home, and how much your home is worth when you sell.