Government Mortgage Relief Programs

Qualifications, Instructions and Resources
 

In response to the recent housing crisis, the Obama Administration introduced the Making Home Affordable plan. The MHA plan essentially comprises two mortgage relief programs to help troubled homeowners - a loan modification program and a refinance program.

Federal Mortgage Relief - Modification

This page contains a breif description of the loan modification program. Full a full description of the qualifications and how to apply view the How the Government Loan Modification Program Works page.

The purpose of a mortgage modification is to get your monthly payment to a more affordable level. An "affordable" mortgage payment is typically defined as 31% of the borrower's monthly gross income. This is achieved by modifying one or more components of your mortgage:

  • Lowering the interest rate
  • Extendeding the life of the loan
  • Lowering the loan principle

Eligibility

There are a lot of factors that contribute to a borrower qualifying for the loan modification. Use the online qualifier provided on this website to determine how likely you are to qualify for a loan modification:

How to apply

If youre ready to begin negotiating for a loan modification, get some free advice before contacting your lender. Consider talking to a HUD-approved, nonprofit housing consultant and find out how likely you are to qualify for a loan modification based on your individual mortgage and financial situation.

What if you don't qualify or have been denied?

If you don't qualify for a loan mod or if you've been denied one in the past, there are two private programs available to you.

Federal Mortgage Relief - Refinance

Many homeowners pay their mortgages on time but are not able to refinance to take advantage of todays lower mortgage rates mainly due to a significant decrease in the value of their home. A Home Affordable Refinance will help borrowers refinance their first mortgage even if the balance owed is up to 125% of the home value. For example, let's say the principle owed on your first mortgage is $500k. You may be able to refinance even if the home value was only $400k.

Eligibility

In order for you to be eligible for the federal refinance program, you must not have been more than 30 days past due on your mortgage in the most recent 12 months.

Additionally, your primary loan needs to be held by Fannie Mae or Freddie Mac. You can look this up on their websites:

Additional eligibility factors can be viewed on the Making Home Affordable website.

Additional Mortgage Relief Resources

Associations

Federal

Banks