WASHINGTON — CUNA has advised credit unions that are FHA-approved that they are also eligible to originate mortgages under the Hope for Homeowners program. But even the FHA admits that the shared equity and appreciation requirements of the loans can make them a tough sell to troubled borrowers.
The program allows lenders to refinance delinquent mortgages into a 30-year-fixed rate FHA-insured mortgage.
Lender participation is voluntary.
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FHA Housing Commissioner Brian Montgomery asked lenders to pitch H4H at the mortgage bankers' conference held earlier this month, but he admitted that explaining the shared equity and appreciation parts of the program to consumers is difficult for lending staff.
One of the program's requirements is that borrowers must agree to share with FHA both the equity created at the beginning of the new mortgage and any future home appreciation.
Interest in the program seems to be high, FHA has reportedly been fielding 1,000 calls a day from interested borrowers.
H4H was created under the Housing and Economic Recovery Act of 2008, which was signed into law in July.
Of the nation's 8,136 credit unions, 123 were FHA-approved as of September 2008.
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