Is There A Congress Mortgage Stimulus Program
With Covid-era relief efforts winding down, some Congress mortgage stimulus programs are coming to a close.
Fortunately, homeowners who need to lower their mortgage payments are not out of options.
Millions of homeowners are still refinance eligible. And with a wide variety of mortgage programs available, even those with little or no equity might qualify for a lower rate and cheaper monthly payment.
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What Is A Mortgage Relief Refinance
When most people think of government or Congress mortgage relief, theyre thinking of HARP the Home Affordable Refinance Program.
HARP was a government program rolled out by the Federal Housing Finance Agency in 2009. For nine years, it helped millions of homeowners refinance after being hard-hit by the housing crisis.
The HARP program ended in 2018.
But many homeowners were still underwater on their mortgages especially in areas where home values have fallen instead of rising in recent years.
So Fannie Mae and Freddie Mac created similar relief programs, called HIRO and FMERR, to help homeowners refinance with little or no home equity.
The federal government also offers mortgage relief via the FHA, VA, and USDA Streamline Refinance programs. These low-doc refinance loans dont require a home appraisal, so homeowners can refinance even if they have very little home equity or if their home values have fallen.
How To Find Out If Your Loan Is Federally Backed
To find out whether your loan is backed by the federal government, making you eligible for the help noted above, here are some actions that you can take:
- Check online. Use loan lookup tools provided by Fannie Mae or Freddie Mac to find out if either of those two government-backed providers owns your mortgage.
- Check the Mortgage Electronic Registration Systems website to find your servicer, if you dont know who it is.
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Mortgage Refinance Relief In 2021
The HARP program was live between April 2009 and the end of 2018. It helped more than 3.5 million borrowers successfully refinance their Fannie or Freddie mortgages.
In recent years, the Fannie Mae High LTV Refinance Option and the Freddie Mac Enhanced Relief Refinance program were introduced to offer similar refinance relief to HARP.
Pros And Cons Of Refinancing Second Mortgages
here are a number of pros and cons to consider when it comes to refinancing second mortgages.
- Change your existing loan rate and term: If interest rates have dropped, you may want to consider refinancing to take advantage of new rates.
- Lower monthly payments: Lower interest rates may also mean lower monthly payments on your house.
- Allow you to switch to a fixed interest rate: This is good for those who are at a variable rate and would want a fixed rate due to rising interest rates.
- Consolidate debt: Refinancing your second mortgage will give you access to more funds, depending on your homes equity, that you can then use to consolidate high-interest debt, such as credit card debt or student loans.
- Consider the extended life of the loan: If you refinance a second loan, you will usually be prolonging the life of the loan and, therefore, be making payments longer.
- Cost: Refinancing can be costly, as you will need to pay, at minimum, an appraisal fee, as well as closing costs.
Refinancing a second mortgage may be the right option for you if you are seeking a more favorable interest rate or lower monthly mortgage payments. Refinancing a second mortgage is similar to refinancing a first mortgage you will want to have a good credit score, employment history, and debt-to-income ratio to qualify for the best interest rates.
Talk to an expert before pursuing a refinancing of a second mortgage to ensure that it is the best choice for you.
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What Is A Cash
A cash-out refinance is the act of replacing your current mortgage with a new one. When you refinance your home, the new mortgage may have more favorable terms, such as a lower interest rate or a lower monthly payment. Refinancing is a popular option to pursue when interest rates drop.
A cash-out refinance is essentially a new mortgage with a home equity loan amount higher than what you previously owed on your old mortgage. Once the home equity loan is disbursed, the difference between your new loan amount and current loan balance goes to your pockets. This allows any borrower to use their home mortgage to get some cash.
You must have built equity on your home in order to cash-out refinance, and you must usually leave 20% of the equity in the home if you are going with an FHA or conventional loan.
Heres an example of a cash-out refinance at work:
Current Home Value: $200,000
Equity Left in the Home : $40,000
New Loan Amount: $160,000
Cash out: $60,000
You will have to factor in closing costs when determining your maximum cash out, but this gives you a general idea. VA loans allow you to get a cash-out loan for 100% of the home value.
The money that you pocket from a cash-out loan is considered debt, so it is tax-free. Many homeowners commonly reinvest this money back into their homes, using the funds for renovations and other home improvements.
How To Be Eligible For Rent Relief
While property values have risen as a result of the COVID-19 outbreak, some renters have not benefited as well. The government eviction moratorium is set to expire on June 30, 2021, potentially leaving millions of more homeowners subject to eviction.
Nearly 14% of renters are late on their payments, according to the Center on Budget and Policy Priorities. Six million renters owe roughly $20 billion in rent payments, as per new research from the University of California, Berkeley.
Some Americans are expecting a fourth stimulus check to help them pay their expenses, but this is doubtful. The good news is that if you rent, you may be eligible for stimulus payments. Here’s how to get rent assistance, as per Forbes:
- You are paying rent as a residential renter.
- You or someone in your household has qualified for unemployment benefits, lost income, incurred significant costs, or experienced financial hardship as a direct or indirect result of the pandemic.
- You or someone in your household can demonstrate a risk of homelessness or housing instability.
- Your household income is below 80% of the area standard income.
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Homeowner Stimulus Checks Are Coming How To Get Your Money From This $10b Fund
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As part of the American Rescue Plan stimulus relief bill, $10 billion dollars was included in the Homeowners Assistance Fund providing money to homeowners in assistance with mortgage payments in order to prevent delinquencies, foreclosures and late payments on utilities amongst other things.
The law prioritizes funds for homeowners who have been hardest hit by the pandemic. The Treasury Department states that it uses local and national income indicators to maximize the impact of where the money is distributed.
The HAF provides a minimum of $50 million for each state, the District of Columbia and Puerto Rico and $498 million for Tribes or Tribally-designated housing entities and the Department of Hawaiian Home Lands. $30 million is also available for the territories of Guam, American Samoa, the U.S. Virgin Islands and the Commonwealth of the Northern Mariana Islands.
Homeowners are eligible to receive HAF money if they have experienced financial hardship after January 21, 2020 AND have income equal to or less than 150% of the area median income. This means three times the income limit for very low income families, for the relevant household size, as published by HUD, according to the Treasury Department.
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What Can Americans Do To Help Pay Their Mortgages
There isnt a specific program created by Congress for mortgages and stimulus aid. There has been help made available to those that own their homes though.
This includes mortgage payments, utility bills, and homeowners insurance.
The cash is federal funding but its being given to the states to distribute it.
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Why Refinance Second Mortgages
There are a number of reasons to refinance a second mortgage. Many times, they may be different than the reason used to refinance the first time.
Some borrowers may refinance for lower interest rates, especially if those rates are significantly lower than when they took out of their second mortgage, or if their financial situation has improved. This is a common step taken by people with improved credit scores.
The types of second mortgages people may want to refinance for lower interest rates include:
- Piggyback Loan: This is a home equity loan or line of credit that is made at the same time as your main mortgage. It allows borrowers with low down-payment savings to acquire loans for more funds to lower their loan-to-value ratio and to qualify for a mortgage without paying private mortgage insurance .
- Home equity line of credit : This is essentially a revolving source of funds that you can access as you choose. HELOCs usually include a withdrawal period, where you can access as little or as much of your available funds as you want, followed by a repayment period that requires you to pay back the principal, plus interest.
- Home equity loan: This is a loan in which you use your home equity as collateral. It comes as a lump sum of cash.
Us Home Stimulus Act 202: What States Are Sending Checks
There is support on offer in a number of states
There is support available for millions of homeowners in the United States, as a federal program is helping when it comes to aiding any residents who need to catch up on their late payments.
There is up to 80,000 dollars on offer for people who are still paying their mortgage payments, with many homeowners having been affected by the loss of their job or reduced hours as a result of the COVID-19 pandemic.
US president Joe Biden‘s American Rescue Plan Act ensured that there was some stimulus money put aside for states to then use to support any vulnerable homeowners who could be at risk of losing their homes. In order to receive the money, however, states had to apply to get the support.
According to the National Council of State Housing Agencies , all of the states and eligible territories applied to receive the financial aid for homeowners. Now, the US Department of Treasury is looking to work in conjunction with each state to set up their own homeowner assistance fund.
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But Homeowners Have Plenty Of Alternatives
The money can go towards various expenses such as home improvements, remodels, debt or. Initially, it was thought that only the forbearance could be requested for federally backed loans such as the fha and va. there’s an ad circulating on social media that promises thousands of dollars for.
State And Federal Unemployment Assistance
Laidoff workers may be eligible for unemployment income. The amount of unemployment income youre eligible to receive varies by state.
Visit your state governments website to see what unemployment assistance is available where you are. You can find contact information for your state government and agencies here.
In addition, the recentlypassed American Rescue Plan renews federal unemployment assistance .
Those who collect state unemployment assistance may also be eligible for an additional $300 per week in federal unemployment income, thanks to the new stimulus bill. This will be available until September 6, 2021.
The American Rescue Plan also includes direct payments of up to $1,400 for individuals with an adjusted gross income of $75,000 or less and couples with an AGI of $150,000 or less.
Families will receive an additional stimulus check of up to $1,400 for each qualified dependent.
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Streamline Refinancing For Fha Va And Usda Loans
Popular mortgage relief programs since 2009 have only been available to homeowners with conventional mortgages backed by Fannie Mae or Freddie Mac.
But what if your loan is government-backed?
Homeowners with federally-backed FHA, VA, and USDA mortgages have access to different mortgage programs than those with conventional loans.
Namely, they can use a Streamline Refinance.
The Streamline Refinance is a special mortgage refi program for people with government-backed loans.
Its similar to a mortgage relief refinance, because you can use a Streamline Refi even if your home is underwater or has very little equity.
And a Streamline Refinance has other benefits, too.
- Theres less paperwork because you dont have to re-verify your income or employment or get the home appraised
- Government-backed loans typically have below-market mortgage interest rates
- Closing costs are typically cheaper
Homeowners can qualify for an FHA Streamline if theyve made at least three consecutive on-time payments on their existing FHA loan.
Even if you make your three consecutive payments while in forbearance, you may qualify for FHA Streamline refinancing. The Department of Housing and Urban Development , which oversees the Federal Housing Administration, is one of the more lenient housing agencies.
For a VA Streamline Refinance , the rules are more lenient.
How Does Fha Cash
A Federal Housing Administration loan is a mortgage that is insured by the Federal Housing Administration. This loan is a great option for those who may not be approved for a conventional loan, as it has less restrictive qualification requirements. Your current mortgage does not have to be an FHA loan in order to qualify for an FHA cash-out refinance.
The way that a cash-out refinance works is that you get a new FHA mortgage that exceeds the amount owed on your current mortgage, then you use that loan to pay off your existing loan.
The difference between your mortgage balance and current home value is the cash out. You can refinance as much as 80% of your homes value in order to cash out your equity.
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Stimulus Checks: Is Your State Giving Out Money This Year
The federal government is no longer sending out stimulus money, but some states have stepped up to send residents a fourth stimulus check in 2022. Four states are currently preparing more stimulus payments and while everyone may not be eligible, these payments stand to benefit 87 million residents in total, Marca reported.
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Who Qualifies For Homeowner Stimulus
It has to be noted that this scheme corresponds only to people who suffered from hardship following the COVID-19 pandemic, which means that the impact of the virus affected their income after January 21, 2020.
“Homeowners are eligible to receive amounts allocated to a HAF participant under the HAF if they experienced a financial hardship after January 21, 2020 and have incomes equal to or less than 150 percent of the area median income or 100 percent of the median income for the United States, whichever is greater,” explains the US Treasury.
“A HAF participant may provide HAF funds only to a homeowner with respect to qualified expenses related to the dwelling that is such homeowner’s primary residence. HAF participants must require homeowners to attest that they experienced financial hardship after January 21, 2020. The attestation must describe the nature of the financial hardship .”
The US Treasury also stresses that no less than 60 percent of the amount that the fillers will receive must be used for “qualified expenses that assist homeowners having incomes equal to or less than 100 percent of the area median income or equal to or less than 100 percent of the median income for the United States, whichever is greater.”
In the event you need the help of an expert, it is advisable to speak to a mortgage servicer and ask them to assess your conditions and eligibility.
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Integrating Housing Counseling And Plain Language Education Materials
Treasury has encouraged all HAF programs to integrate housing counseling services into HAF program plans. Housing counselors are fluent in the various options available to homeowners and can also help homeowners assess their financial situation holistically, often providing budgeting support and referrals to other available resources.
The State of Kentucky has developed a plain-language explainer video, available in English and Spanish, entitled “Know Your Options: COVID-19 Loss Mitigation Options.” The video walks the viewer through the relative advantages and tradeoffs between loss mitigation and HAF options for homeowners through the Federal Housing Administration, the U.S. Department of Veterans Affairs, the U.S. Department of Agriculture, and Fannie Mae or Freddie Mac. This video outlines key questions the potential applicant should ask themselves and encourages engagement with their servicer. All HAF applicants in Kentucky are also paired with a HUD-certified housing counselor who helps the homeowner to assess and understand options. Housing counseling agencies walk the borrowers through their loss mitigation options. If the homeowner has exhausted, is ineligible for, or wishes to bypass loss mitigation options, and is also eligible for HAF, the housing counselor proceeds to process their HAF application.
Eligibility To Buy A Hud Home
The main qualifications to buy a HUD home usually depend on your current credit score. If you have a good credit score, you have a higher chance of getting the HUD home. You should also be capable of getting a mortgage and ready to make a down payment in cash. Additionally, you can also use an FHA-insured mortgage to purchase a HUD home.
The process is as simple as searching for a real estate property owned by the HUD on the internet. After your search, you should learn about the available properties and how much they are selling for.
Once you have discovered a property that matches your interests and preferences, you can easily make an application for the home and purchase it with the FDA-protected mortgage. The process itself is not difficult, and as long as you are eligible, you can have the home in less time, and there wont be many checks to go through before you get the property.
Mortgage rates are reducing in terms of interest, and with the rates at such a low level in history, more people are taking up the opportunity to purchase a property or a home.
Luckily, the government has put some programs in place to ensure that people can get protected and insured whenever they are making payments on their mortgage. These payments are always insured even if the buyer defaults on the payments.
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