Colorado Springs homeowners with FHA- backed mortgages are catching a break with a new refinance program that aims to help  lower monthly payments.

The FHA Streamline Refinance program went into effect Monday and is designed to help homeowners who bought houses roughly between 2005 and May 31, 2009, when interest rates were running at 6 percent or higher. Those same homeowners found themselves underwater when their home values dropped, and refinancing was not an option.

The FHA Streamline program does not care if the homeowner is underwater, said loan adviser Richard Phillips at CB &T Mortgage, Central Bancorp in Colorado Springs.

In Colorado Springs, about 40 percent of home loans taken out between 2005 and 2009 were FHA-backed, Phillips said.

By Tuesday, he already was working on a half-dozen refinance home loans through the FHA Streamline Refinance program.

Home buyers can refinance a home loan through any FHA lender.

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Other recent refinance programs, including the Home Affordable Refinance Program, were duds and not accessible to most homeowners, Phillips said. For example, the HARP required that the homeowner be 5 percent underwater, when most buyers were closer to 10 percent underwater, he said.

The best part of the FHA Streamline program, Phillips said, is that it does not require a home appraisal. So, homeowners can refinance based on their original purchase price as the current value – even if they are underwater on their mortgage.

For example, a homebuyer with a $175,000 mortgage at 6 percent interest could get refinanced at 3.7 percent and see about $230 monthly payment reduction.

“It’s a good decrease,” Phillips said. “With this FHA refinance, you are really getting a true no-cost refinance — the point is to get savings to people who need it the most.”

As with any refinance, there always is a downside, Phillips said. If a homeowner opts for this program, they will start over with a 30-year mortgage, even if they have already been paying on the previous mortgage for several years.

For details, visit FHA Refinance.