Hope for Homeowners program was enacted to assist homeowners either in default or at risk of foreclosure. It began in October of 2008 and will end on September 30, 2011. Those eligible for the program will be provided a new 30-year, fixed-rate FHA-insured mortgage. For homeowners finding it hard to pay their existing mortgages, this may provide an avenue to refinance their current mortgage into one that they can afford.

Both lender and homeowner must formally agree to participate before a new mortgage can be approved.

Some of the program requirements are as follows:

* Your home must be your primary residence, and you cannot have ownership in other residential property, like a second home.
* Your current mortgage originated on or prior to January 1, 2008, and you’ve made a minimum of six full monthly payments.
* You are unable to pay your current mortgage payments without assistance.
* Effective March 2008, your monthly payments to your mortgage company must have exceeded 31 percent of your combined gross monthly income.
* You attest that in the previous ten years you haven’t been convicted of fraud; intentionally not paid any debts; and didn’t deliberately or willfully submit false information when obtaining your current mortgage.

Before proceeding with the program, you’ll want to know some specifics:

* You must initiate the program through your lender, or a FHA-approved housing counselor or lender.
* Your new mortgage payment cannot exceed 31 percent of your monthly gross income.
* Your new mortgage cannot exceed 90 percent of the new appraisal of your home’s value.

If your home is appraised at $100,000, your new mortgage will be $90,000. The drawback, however, is that you must agree to share the original equity created - the $10,000 - and any future appreciation in the home’s value. The payout doesn’t occur, though, until or unless you sell your home. At that time, you will split the equity with FHA, accordingly. Year one, you would receive nothing, but the FHA receives 100% of the equity. Year two, you receive 10 percent; FHA receives 90 percent, etc.

Every year, thereafter, you will receive an additional 10 percent of the home’s equity until you reach year five. Year five, and after, you will split the equity with the FHA equally at 50 percent. Keep in mind, that if your home’s value diminishes when you decide to sell, you will owe nothing.

A major drawback to the program is that you have to come up with a 3 percent mortgage insurance payment upfront. You also have to pay a 1.5 percent annual premium for mortgage insurance on your outstanding balance, which will be added to your monthly mortgage payment. In addition, you will be responsible for paying closing costs on your new loan.

Your new interest rate may, or may not, be less than your current rate. It will be determined by current rates and provided to you by your lender. No second mortgage is allowed for the first five years after your new loan. The only exception is emergency repairs.

If you think this program may be able to meet your needs and keep you in your home, it might be worth looking into.

Ki helps buyers and sellers interested in the Austin market. The website has featured information and statistics for Austin real estate. The website allows future homeowners to search Austin real estate by Austin MLS number. The site also provides a graph showing recent mortgage rate trends.