On September 7, HUD launched the FHA Short Refinance option, which will allow underwater non-FHA borrowers (i) who are current on their existing mortgage and (ii) whose lien holders agree to write off at least 10% of the unpaid principal balance of the first mortgage, to qualify for a new FHA-insured mortgage.  To be eligible, servicers must execute a Servicer Participation Agreement with Fannie Mae, in its capacity as financial agent for the United States, on or before October 3. HUD Release. FHA Mortgage Letter.