FHA is not a lender. It insures the loans against defaults so that banks are willing to lend on these mortgages.

One of the eligibility requirement for FHA-Secure is that the mortgage loan being refinanced has to be a non-FHA ARM (adjustable rate mortgage) loan.

The FHASecure loan program will finance borrowers up to a 97.75% Loan to value. Up to 6 months past due mortgage payments may be included in the loan amount if the borrower qualifies.

A new appraisal is ordered for the property for an FHASecure loan program. The new appraisal for the Fhasecure loan should adhere to FHA guidelines.

The main benefit of the FHASecure loan program is getting consumers out of adjustable rate loan programs they cannot afford. The FHASecure loan will be for a fixed rate.

The FHAsecure loan program was created not as a bailout for mortgage lending institutions, but rather as a tool to help consumers caught in a jam. Over 2 trillion dollars of mortgages are due to reset in 2008, according to some analysts.

There are specific criteria that must be met in order to qualify for FHASecure:

1. First and foremost, you must have a history of on-time mortgage payments before your teaser rate expired -- which means you must have a decent credit history.

2. Your interest rate must have reset after June 2005 but before December 2009.

3. You must have at least 3 percent cash or equity in your home.

4. You must have a sustained history of employment.

5. You must have sufficient income to make your mortgage payments.

HUD estimates the FHA will refinance over 100,000 subprime borrowers into FHA loans by the end of this fiscal year, which ends Sept. 30. And the FHA could refinance another 160,000 subprime borrowers in FY 2008 without any changes to its program.

Under certain conditions, FHA will insure first mortgages where (1) the existing note holder writes off the amount of indebtedness that cannot be refinanced into the FHA insured mortgage; or (2) either the FHA-approved lender making the new mortgage or the existing note holder may take back a second lien that includes closing costs, arrearages or previous secondary financing if the indebtedness exceeds FHA prescribed LTV and maximum mortgage amount limits.

FHASecure Loans are excellent choices for homeowners who are great borrowers but were misguided into high-cost loans with teaser rates. The FHASecure loans will bring liquidity into the mortgage market and allow more money to pooled and securitized with Ginnie Mae.