Principal Write Downs and Debt Forgiveness Changes

The Department of Housing and Urban Development (HUD) and the Department of the Treasury (DOT) announced improvements to the existing Making Home Affordable Program (MHA) and Federal Housing Administration (FHA) refinance program that will give a greater number of responsible borrowers an opportunity to remain in their homes. These improvements are developed to sustain homeownership by providing borrowers, who owe more on their mortgage than the value of their home, a chance to refinance into an affordable FHA loan. This opportunity gives borrowers who are current on their mortgage to qualify for an FHA refinance loan given that the lender or investor writes off the unpaid principal balance of the original first lien mortgage by at least 10%.

FHA NEP Highlights