Don't panic if you need to refinance quickly; dozens of state and federal government programs can help.

The Beatles cried "Help! I need somebody," and the Beach Boys pleaded "Help me, Rhonda." But the kind of help that you need if you must refinance doesn't lend itself to a catchy pop tune. Besides, it's tough to think of words that rhyme with "refinancing."

HUD/FHA refinance

Begin your search for government refinance assistance at the federal level. The Department of Housing and Urban Development (HUD), and the Federal Housing Administration (FHA) give low- and moderate-income homeowners access to affordable refinancing by providing them with mortgage insurance. Lenders are willing to make loans under the FHA's lenient underwriting guidelines, because the mortgage insurance significantly reduces the risk of default.

One of the most appealing aspects of FHA refinances is the low equity requirement. Traditional lenders will want to see equity of 20 percent of the home's value; by contrast, the FHA requires only 3.5 percent. You'll have to pay upfront and ongoing mortgage insurance premiums on your new mortgage, but you should enjoy a competitive interest rate and attractive terms. To get familiar with your FHA refinancing options, visit the FHA website and talk to your lender.

VA refinance

If you're a veteran, you may also qualify for a Veteran's Administration (VA) mortgage refinance. The VA offers streamlined refinancing for existing VA borrowers, as well as cash-out refinances and refinances of non-VA loans. VA refinances don't have the mortgage insurance premiums that are required on FHA loans, and the minimum equity can be as low as 10 percent. As with FHA mortgages, VA loans are made by private lenders.

Have some Hope

Hope Now is an alliance of various mortgage industry professionals, including investors and counselors, which helps educate homeowners about refinancing and other foreclosure avoidance solutions. The Hope Now counselors are prepared to listen to your circumstances and walk you through your options. You can find out more by visiting hopenow.com, or calling (888) 995-HOPE.

Looking closer to home

With the recent passing of the American Housing Rescue and Foreclosure Prevention Act of 2008, state governments will soon have more freedom to assist residents with refinancing. A key provision of the housing stimulus package gives states the authority to use funding from Mortgage Revenue Bonds (MRBs) to refinance subprime mortgages. Your state may have additional refinance assistance programs, as well.

To learn more, visit the website for the National Council of State Housing Agencies (NCSHA) and review the list of agencies by state. Your state's organization might be listed as the Housing Department, Housing and Finance Authority, Housing Authority, Department of Community Affairs, etc. The NCSHA also provides links to each state agency's website, so you can click through to learn about the programs available to you.

Once you find a refinancing solution, you may feel like composing some pop song lyrics. You'll just have to avoid ending any lines with "refinancing."

Published on February 22, 2008