While there are several state housing financing agencies with existing refinancing programs, those programs have NOT used the new federal legislative authority enacted this summer to use lower interest rate tax exempt revenue bonds to refinance subprime/ARM loans made from 2002-2007. (Additional bond cap was also allocated for this and other related housing uses).
I recently blogged about an Ohio bond issue that is expected to establish such a program.
I have now found a second program already in operation that is administered by the Tennessee Housing Development Agency (THDA).
Their program is called Great Save. The current interest rate is 6.1%, substantially below the refinance rates offered by other state housing finance agencies, and a significant savings to home buyers with qualified sub prime/ARM loans. Participating lenders include Bank of America, Countrywide, and Wells Fargo.
A one page summary is HERE and includes details on the various options used by THDA to demonstrate the financial hardship requirement of the federal legislation. (These Tennessee options have been designed to meet IRS guidance that requires a good faith determination by the bond issuer of financial hardship).
Outreach
More details HERE reveal that the Tennessee Housing Development Agency is planning to send letters to more than 22,500 ARM loan holders with moderately priced homes to let them know of the new program; to date more than 9,800 letters have already been sent.
Kudos to THDA leadership and staff for getting their program operational within 60 days of enactment of the summer federal housing legislation, and for making such a concerted outreach effort to help families reduce their monthly housing expenses to affordable levels and thus help avoid potential future defaults and foreclosures.
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