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How to refinance if under water?

I'm about $25K under water with my condo that I've owned for 4+ years. I've never been late on a mortgage payment, but I'm stuck in a 6.725% interest rate for 30-yrs. I would love to be able to take advantage of the extremely low interest rates so that I can lower my monthly payment and use that money to pay my student loans down faster. However I'm not in a fanny/freddy backed loan. I used a first time buyer program through the State of NH.  They say they don't do refinances and I don't qualify for modification.  They say I can only short sale, but I don't want to sell my place.  Is there ANY way I can get refinanced while the rates are low?  Please help if you can. Any info would be cherished.
Thanks,
Megan
  • August 07 2010 - Rochester
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Answers (9)

Best Answer

FHA has a new program coming out in September.  That might work for you.

Its designed specificaly for people in your situation. 

When FHA makes changes and anouncements they notify everyone through mortgagee letters.  The one I'm referring to is 2010-23 

google "mortgagee letter 2010-23"

 

  • August 09 2010
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I know that my development is far less than 50% rentals - we're at about 75% owned/occupied.  Also, nobody owns more than 10% of the units. So it's sounding better all the time! I can't wait until September to get the ball rolling hopefully!  I feel like I've been stuck for years!

Thanks again,
Megan
  • August 09 2010
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FYI

Its a new program and the guidelines maybe different than a standard FHA program but ussually in order to do a new FHA loan your condominium development has to be FHA approved or approvable?
Which means it needs to be less than 50% investor units (rentals).  and  one person can't own more than 10% of the units in the condominium development. 

Brian
  • August 09 2010
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Wow! Thank you so much! That's exactly the kind of information I was hoping to find.  I definitely qualify for all of those rules, and I am hopeful that NHHFA will work with me on the under-water part after September.  Thanks so much for the "mortgagee letter 2010-23" information and I will definitely follow-up on that after it starts in September.  There may be a light at the end of the tunnel after all!
:-)
Megan
  • August 09 2010
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I've checked both Fannie and Freddie sites to verify that my loan is not FHA.  I've also spoken with NHHFA to verify that it's not FHA. 
Very frustrating, to say the least.
  • August 09 2010
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I want to make sure your not letting an oppurtunity pass by.

Your correct that NHHFA doesn't do any refinances.

Even though its called it a first time buyer program doesn't mean it wasn't also an FHA loan. 
 
The majority of the NHHFA are done in combination with something else.  Four years ago most of the NHHFA were done in combination with FHA. 

 

  • August 09 2010
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Unfortunately, FHA was not involved in my loan with NHHFA.  It was a first time buyer's program, and they have since told me that they do not refinance any loans.  I'm stuck.  But I will give my credit union a try, as I have decent credit (710), so hopefully that will work. 

Thank you both for your suggestions.  I'll take any I can get.
  • August 09 2010
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Sounds like you may have a New Hampshire Housing finance authority loan.
four years ago many of them were done in combination with an FHA loan.

check your closing documents to see if FHA was involved.

If so you can probably do an FHA streamline refinance. 

  • August 09 2010
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Megan,

If you have good credit, try your savings bank.  They might give you the loan as a new first mortgage, so you can pay off the other mortgage.  If they cannot appraise the home, you might want to pay off the deficit from savings.  Perhaps a 401k might allow you to borrow that money for the "down payment"  and pay it back with interest to yourself.  Talk to the bank and offer to put all your accounts with them (if they are not already).  It is possible, with a good banking relationship, a savings bank might give you the loan.  They also do not usually sell to FNMA or Freedie Mac, but loan their depositors money.  Rates should be very good if you have a high FICO score.   Sorry this answer is not imaginative, but sometimes a credit worthy borrower might be rewarded by good old fashioned banking relationships.  Good Luck.
  • August 07 2010
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