MHDC offering up to $13,000 in aggressive refinance program for homeowners

Forgivable Second Mortgage and Grant

> Closing Costs Assistance
 

	Qualifying borrowers are eligible for a second mortgage of up to 3% of the primary loan amount to be used to fund closing costs and related expenses associated with refinancing their existing mortgage.
	Because the second mortgage is forgiven after five years of occupancy by the owner, it does not require monthly payments.

> Principal Reduction
 

	Homeowners still unable to refinance their existing mortgage because of insufficient equity are eligible for an additional $10,000 grant to help them meet program requirements.
	To receive the grant, the homeowner must also use closing cost assistance in the form of a second mortgage of up to 3% of the primary loan. The total combined amount of the grant and second mortgage is $13,000.
	To qualify for the grant, the ratio of the amount owed as a percentage of the value of the home must exceed the maximum allowed by Federal Housing Agency (FHA) guidelines (97.75%).
	The borrower must receive face-to-face counseling from a HUD-approved credit counseling agency. A list of agencies can be found on the HUD website at www.hud.gov.

Refinance Guidelines
 

	The borrower must receive face-to-face counseling from a HUD-approved credit counseling agency www.hud.gov.
	Only owner-occupied, single family properties are eligible.
	The refinance must result in a new principal and interest payment at least $100 per month lower than the existing payment, or the interest rate must be lowered by 1%. If these requirements are not met, refinancing is still permissible if the existing mortgage is an adjustable rate or balloon mortgage.
	Cash-out is not allowed.

These loans are made through a network of certified lenders. Homeowners looking to refinance must meet applicable MHDC mortgage financing rules, including income and purchase price limits.

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