If you have tried to refinance, but couldn’t because of income, or insufficient home equity, consider the FHA Short Pay Refinance Program.

The FHA Short Pay Refinance Program is backed by HUD, just like a traditional FHA Loan, and offers current homeowners an opportunity to refinance into a fixed rate mortgage for payment relief. Traditionally, in qualifying for a home mortgage refinance, you need to have good credit, stable income and have enough equity in your property to protect the lender. This still holds true for most mortgages.

The FHA Short Pay Refinance Program is an innovative home refinance program which works for borrowers who are current on their mortgage, have had no previous foreclosure or bankruptcy, and who have suffered a loss in income and/or can show an incapacity to repay the existing debt. In order to qualify for the FHA refinance, borrowers have to be able to also show income whether it be self-employed or W-2ed and a valuation needs to be in place.

The first thing to do is to contact the lender directly about the FHA Short Pay Refinance Program.

Along with the other items needed for financing, is a written principal balance reduction agreement from the lender or lenders which are being paid off in the transaction. Due to the insufficient equity, there needs to be an arrangement made in writing in order for the transaction to proceed with closing escrow. Borrowers can talk to their lenders directly about this program and take the steps necessary to get the written agreement upfront to take to their mortgage lender of choice.

The FHA Short Pay Refinance Program helps borrowers who are presently under water and who have experienced a loss in monthly income.

For folks who are presently under water, who cannot refinance due to insufficient equity this program offers a tangible solution with many long-term benefits. Folks today can easily secure a 4.375 – 4.5% 30 year fixed rate FHA refinance and put themselves in position to pay off their mortgage faster. Lastly, another possible solution for folks who do not meet the criteria of this particular loan product is to pay the mortgage balance down and still lock-in a very low rate of interest. Compared to interest rates from a few years ago, an FHA Refinance with mortgage insurance, still can make a lot of sense for folks looking to save money and reduce mortgage interest expense.

Scott Sheldon is an FHA specialist and your best source for FHA home loans with the lowest interest rates. Mr. Sheldon can be reached at 707-217-4000 for the FHA Short Pay Refinance Program.