DENVER – Helping to stem the growing tide of home foreclosures in Colorado, the Colorado Housing and Finance Authority (CHFA) today announced it will begin offering FHASecure, a new mortgage refinance product to help borrowers avoid foreclosure.

Designed by the U.S. Department of Housing and Urban Development (HUD), FHA Secure transitions homeowners with at-risk conventional fixed rate or adjustable rate (ARM) mortgages to a fixed-rate, 30-year FHA mortgage; helping them regain payment stability and greatly reduce their risk of foreclosure. FHASecure is unique in that even delinquent homeowners can qualify if they can demonstrate their delinquency is due to an ARM reset. Delinquent borrowers must also show their mortgage and other debt payments were paid on time during the six months prior to the ARM reset.

CHFA Executive Director and CEO Milroy A. Alexander said the new program is key to CHFA’s mission of helping low-and-moderate income Coloradans get into – and stay in – a home.

“Low- and moderate-income earners are at the greatest risk of foreclosure because they have the least amount of flexibility in their monthly budgets,” he said.  “This new program will help borrowers with strong credit history and stable employment stay in their homes.  At the same time it will stem the tide of foreclosures our state is experiencing.”

He noted that Colorado is being hit particularly hard, ranking sixth per capita in the number of seriously delinquent borrowers, despite having just two percent of subprime loans nationwide.*

In order to qualify for FHASecure, borrowers must meet the following criteria:

• Refinance must be for a non-FHA fixed rate or adjustable rate mortgage that has or will reset between June 2005 and Dec. 2008.
• Delinquent borrowers must be able to demonstrate that delinquency is due to ARM reset. Additionally, the borrower must have been current in making monthly payments and other debt for six months prior to reset.
• Borrower must meet CHFA qualified income limits and FHA loan limits.
• Borrower must complete a CHFA approved Money Management or Homebuyer’s Education course.

CHFA’s primary Home Finance efforts are geared towards first-time homebuyers earning less than 80 percent of the area medium income (AMI). CHFA chose to enter the refinance market earlier this year in response to the foreclosure problems in the state, with their launch of HomeStretch, a product geared towards ARM holders with no late payment history who wish to avoid a pending ARM reset.

CHFA will offer FHASecure through its FHA approved lenders through Dec. 31, 2008. Second Mortgage Loan options are available for borrowers seeking support for closing costs. FHASecure does not allow a cash-out option for borrowers. Borrowers do not need to be first-time homebuyers, however CHFA Money Management or Homebuyer Education requirements still apply. For more information about FHASecure, or to view a complete listing of CHFA approved lenders, visit www.chfainfo.com.

About the Colorado Housing and Finance Authority (CHFA)  

*Data Source: Report and Recommendations by the Majority Staff of the Joint Economic Committee. October 2007

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