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Can I refinance a VHDA loan that is under water?

I have a VHDA loan from 2007 that is probably close to $20,000 under water.  We are at a 7% interest rate and need to lower our monthly payments due to cutting back to part time at work.  I called VHDA several months ago to see if they would do a rate modification and they basically said no unless we can prove that we can't afford to make our loan payments anymore.  We are not willing to skip a payment, putting our credit in the toilet just to take the chance that they MAY help us.  Is there anyone that can help us?
  • October 30 2012 - US
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Answers (8)

VHDA recently announced a new program caller Rapid Refinance loan. The program is geared towards borrower who currently have a VHDA Interest only loan above 6.00%. For more details please call 571 266 6489 or send your inquiry by filling out an application online: www.sbabbar.com. The program is available for a limited time, beginning July 1st 2013 through September 30, 2013.

  • July 18 2013
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Profile picture for user6141963
I agree. My wife and I have never been late on our mortgage payment, yet due the housing market we cannot take advantage of the low interest rates which would drop our mortgage by about $400 a month. I hope that VHDA does what is right to ALL if its customers and opens up a Streamline Refinance for coventional loans.
  • June 13 2013
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Profile picture for user4944623
what about those with a conventional load that are in the same boat as those who bought with an FHA loan. When is there going to be a streamline program for us? We need assistance just as badly as the people with an fha loan. 
  • April 23 2013
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We have received many inquiries from our customers who received conventional VHDA loans now seeking to refinance to a lower rate.

VHDA conventional loans offered many benefits to our borrowers when they purchased their home. Our programs offered features such as 100% financing with no mortgage insurance.  This provided lower rates and more affordable financing allowing first time homebuyers to purchase homes with less cash at closing and with lower monthly payments. To achieve these benefits, VHDA utilized loan funding sources other than those sponsored by the federal government such as Fannie Mae and Freddie Mac.

Special federal refinancing programs (such as HARP) only apply to loans funded through those federal sources and, unfortunately, VHDA does not currently have a funding source available to assist its borrowers with conventional mortgage loans who owe more on their loans than their homes are worth (underwater).  

Accordingly, such borrowers seeking to refinance at a lower rate would need to obtain traditional refinancing from private lenders offering refinance programs.  However, these new loans would be based on the current value of your home.  Therefore, if you owe more on your loan than the current value of your home, you would be required to make up the difference with your own funds.

It should be noted, however, many borrowers seeking to refinance at a lower rate may find that the addition of mortgage insurance may not result in a significant reduction in their monthly payment. 

We regret that other refinancing options are not available however the historical economic impacts on our industry were impossible to anticipate.

  • December 27 2012
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VHDA is slow moving with the release of their streamline refinance product for existing VHDA conventional loans. Much like they were with the release of the VHDA/ FHA streamline refinance which was finally rolled out in September of 2012. As Virginia's largest VHDA lender, my company has been getting recent information regarding talks of a VHDA/ VA streamline to be offered very soon! Exciting news for all those folks!! Stay tuned...I think it's only a matter of time before they will offer a conventional streamline product. Contact me to be "in the know" about this exciting upcoming program!!

Nevin Bunnell
  • December 20 2012
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Profile picture for user2606939
I contacted VHDA already about refinancing and they told me that we had a conventional VHDA loan not and FHA loan therefore we could not refinance.  We did 100% financing when we bought the house.  Is there any other options for us?
  • November 05 2012
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As the largest VHDA Lender in the state, I would be happy to walk you through the particulars and get you refinanced!! Contact me at your convenience....

Nevin Bunnell
C&F Mortgage
Virginia Beach Branch
  • November 05 2012
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 VHDA is now offering an opportunity to refinance for those with an FHA loan.
Please contact a VHDA lender by visiting www.vhda.com/FindALender and ask them for assistance. 

VHDA Customer Service
  • November 01 2012
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