Refinance Mortgage using Stimulus

Qualifying for stimulus refinance loans involves identifying which governement stimulus program one is eligable to apply for refinancing through. Two such programs are The Homeowners Affordability and Stability Plan which is part of U.S. Government’s Housing and Economic Recovery Act, and the Hope for Home Owners (H4H) program. The U.S. Government has estimated millions of American residents will be able to qualify for these loans in order to assist in building household financial stability. Stimulus refinance loans are not available to everyone as this article will illustrate however for those that do qualify, the problem of low to negative home equity value is addressed by the loan refinancing section of the plan.


A stimulus refinance loan specifically addresses the problem of refinance disqualification from lowered home value or financial distress. Moreover, in the Homeowners Affordability and Stability Plan, the goal is to help responsible mortgage owners refinance their existing mortages even if they have less than 20% equity value in their homes. The refinancing options available to qualifying individuals include both fixed rate and adjustable rate mortgages and the benefits of these loans are as follows:

* Rewards homeowners who have consistently paid their mortgage
* Helps lowers mortgagees mortgage interest rate
* Assists in generating more equity value in property over less time
* Ameliorates some of the refinancing complications exacerbated by refinancing policies
* Potential to reduce mortgage amount by $1000 for 5 years (

Hope for Homeowners loans are different from Homeowners Affodability and Stability plan loans in the sense that the homeowners may be struggling to keep up with mortgage payments. This program refinances loans at 96.5% of current appraised value thereby taking the burden of equity loss off the qualifying loan applicants financial profile. These loans must also be qualified and applied for through existing home mortgage lenders and may also involve a restructuring of the existing loan using the pre-existing mortage amount.


The qualification criteria for Homeowners Affordability and Stability plan require what is called conformity’ which means the existing mortgage must be sponsored or guaranteed by either Freddie Mac or Fannie Mae, two of the largest U.S. mortgage buyers with accountability to the Government. Additionally, the mortgages must be under a predetermined financial value, be for a residence, and cannot have a market value of less than 5% of the pre-refinanced mortgage amount. Other criteria include the time in which the refinancing takes place and when the original mortgage was obtained.

After qualification has been determined, especially mortgage ownership or guarantee from Freddie Mac or Fannie Mae, the refinance loan can be applied for through a loan officer at the existing financial institution that maintains the mortgage In such case, several documents are required as in the case of most mortgages. Typically these include income information, identification, tax documents, existing debt, assets etc.

Accodring to the Department of Housing and Urban Development, Federal Housing Administration, qualifying for the H4H program involves meeting the pre-determined criteria. These criteria include loan origination prior to January 1, 2008, non-intentional default, mortgage payment in excess of 31% of the mortgagee’s gross monthly income and truthful application for original mortgage i.e. non-falsified income and/or other information. These and any other qualifying factors can be viewed at the FHA website or discussed with mortgage servicers.


Stimulus refinance loans are aimed at existing homeowners with either low equity value or troubled financial situations. Since the Homeowners Affordability and Stability Plan loans only address existing homeowners with good credit histories and specific borrowing criteria, they only apply to certain homeowners. Similar qualifying criteria are applied to the H4H program, specifically financial difficulties during home ownership. These criteria are illustrated in this article and in the case of the Housing affordability loans, include mortgage support by one of two named U.S. large mortgage buyers. This may automatically exclude certain mortgagees in similar situations who did not take out conforming’ mortgages. For those who do qualify for stimulus refinance loans, the benefits can include lower mortgage interest premiums, reduce mortgage, refinancing qualification, and low equity relief. To apply for and/or learn more about the stimulus refinance loan options, it may be helpful to contact a loan officer, Housing and Urban Development department (HUD) representative or the U.S. Department of the Treasury.