March 23, 2009

Government helps homeowners refinance

By Marcie Geffner • Bankrate.com

If you're looking for a way to refinance your mortgage, you might want to consider a loan that's backed by the Federal Housing Administration or, if you're a U.S. military veteran, the U.S. Department of Veterans Affairs. Loans backed by these two federal government agencies are especially attractive today because the loan amount limits have been raised, and some loan programs are open to homeowners who have little to no equity or imperfect credit.

Given those benefits, it's no surprise that government-backed loans have accounted for a much larger share of total loan applications. In the second half of last year, government-backed loans accounted for as much as 30 percent of the total loan applications submitted to lenders, according to the Mortgage Bankers Association in Washington, D.C., which has tracked that figure since January 1990. Compare that one-third share to the lowest share of government-backed loans on record -- 5.8 percent in August 2005 -- and it's clear that homebuyers and homeowners have taken a renewed interest in these loans

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