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Making Home Affordable

Last year, President Obama unveiled Making Home Affordable to help borrowers struggling to make their monthly mortgage payments and those facing foreclosure. The primary goal of this program is to offer loan modifications and mortgage refinance to borrowers whose mortgage notes are secured by Fannie Mae and Freddie Mac.

The Making Home Affordable refinancing plan expires on June 10, 2010, while the loan modification program expires December 31, 2012. Two additional programs are currently in the works. The 2nd lien modification program is scheduled to be implemented in the first quarter of 2010. The foreclosure alternatives program is expected to debut in April 2010.

The Home Affordable Refinance Program (HARP) is available to borrowers who hold home loans for residential real estate consisting of one to four units. In order to qualify for HARP, borrowers must be current on their mortgage note and have not been more than 30 days late on payment schedules for the previous twelve months. In order to refinance mortgages, the first mortgage must be equal to or less than 125-percent of current market value.

Borrowers must contact their lender to initiate the Fannie Mae home affordable application process. Lenders require financial documents to determine income to debt ratios, verify income, and obtain evidence that borrowers are current on their home mortgage loan.

The Home Affordable Modification Program (HAMP) might be an option for borrowers whose first mortgage on their primary residence is equal to or less than $729,750 for a single family home, $934,200 for a two-unit home, $1,129,250 for three units, or $1,403,400 for four units.

HARP is available to borrowers whose current mortgage payment is more than 31-percent of their gross income and has become 'unaffordable' due to a change in circumstances. Loan modifications through HAMP are only applicable to home loans financed on or before January 1, 2009.

HAMP loan modifications reduce mortgage payments so they do not exceed 31-percent of borrowers' gross income. This is accomplished by reducing the rate of interest charged against the loan and extending the terms of the note.

Borrowers who are in preforeclosure and meet eligibility requirements can apply for Home Affordable loan modification to stop foreclosure action. If borrowers are approved for HAMP or Home Affordable Foreclosure Alternatives program, they will be placed on a trial period for 90 days. If borrowers do not comply with terms of their modified loan, lenders can commence with foreclosure action.

The Making Home Affordable 2nd Lien Modification Program is expected to be unveiled by the end of March 2010 and available to borrowers who hold a second mortgage. Borrowers who qualify for Home Affordable modification program are automatically eligible for second mortgage modification.

The Home Affordable Foreclosure Alternatives program will be offered in April 2010 to borrowers who can no longer afford to stay in their home. Alternative solutions include short sale and deed in lieu of foreclosure.

Homeowners can learn more about mortgage refinance and loan modification programs by visiting The website provides mortgage and income-to-debt ratio calculators to help borrowers determine if they meet eligibility requirements, along with frequently asked questions and links to resources and additional information.

Our home mortgage library provides a wealth of information and resources on a wide range of real estate topics. We invite you to peruse our articles to learn more about homeownership, prevent foreclosure, understand the process of short sale real estate, and locate resources to help you make informed decisions.

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Published on March 08, 2010 at 03:08 AM | Comments: 1

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The Home Affordable Modification Program is an excellent program. My mother received a modification in 12 days from her lender using this program. It’s good that you’re helping to get the word out.

Cindy Small | June 10, 2010 3:53 PM


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