What is a short refinance?

A short refinance is a type of financing that occurs when a homeowner has an outstanding mortgage for more than the current market value of their home. This type of financing allows the homeowner to refinance their home loan for a new loan that is for less than the value of their home. In some cases, the lender may even forgive some of the outstanding mortgage balance. In the District of Columbia, a short refinance may be executed with the approval of participating lenders and some assistance from the state or federal government. To qualify for a short refinance, homeowners must be current on their mortgage payments and have a reasonable household income. Additionally, the homeowner must be able to demonstrate that the refinance will be beneficial for all parties involved in the transaction. In District of Columbia, the short refinance program is designed to help struggling homeowners avoid foreclosure and modify their loans in order to make their payments more manageable.

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What is a short refinance?

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