MAKING HOME AFFORDABLE GOVERNMENT PROGRAM

 

There are twelve different options available to homeowners who find themselves unable to pay their mortgage payments or who owe more on their mortgages than the value of the home.  They come under the umbrella of the Making Home Affordable (MHA) program, which is administered by the Departments of the Treasury and Housing & Urban Development.  While the options seem to fit most circumstances, it is very important to remember that these are guidelines set up by the government for mortgage servicers to follow.  The banks are not required to participate in any of the programs outlined below.  Some do, some don’t; even if the bank does participate, they may not approve you for the program.   If you believe any of the programs might assist you, ask your mortgage servicer.  They may have some in-house program which might help as well.

MHA options include:

1)      Home Affordable Modification Program (HAMP)

If you are employed but having difficulty making your mortgage payments, the HAMP may lower your monthly mortgage payments.  This program applies not only to a primary residence, but also a property which the owner is currently renting out or intends to rent out.  You may be eligible for HAMP if you meet all of the following criteria:

 

  • You obtained your mortgage on or before January 1, 2009
  • You owe up to $729,750 on your primary residence or single unit rental property
  • The property has not been condemned
  • You have a financial hardship and are either delinquent or in danger of falling behind on your mortgage payments (properties in which the owner does NOT live must be delinquent in order to qualify)
  • You have sufficient, documented income to support a modified payment
  • You have not been convicted in the last ten years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction

 

2)     Principal Reduction Alternative (PRA)

If your home is currently worth significantly less than you owe on it, MHA’s Principal Reduction Alternative (PRA) was designed to encourage mortgage servicers and investors to reduce the amount you owe on your home.  You are eligible for PRA if:

 

  • Your mortgage is not owned or guaranteed by Fannie Mae or Freddie Mac
  • You owe more than your home is worth
  • You occupy the house as your primary residence
  • You obtained your mortgage on or before January 1, 2009
  • Your mortgage payment is more than 31 percent of your gross monthly income
  • You owe up to $729,570 on your 1st mortgage
  • You have a financial hardship and are either delinquent or in danger of falling behind
  • You have sufficient, documented income to support the modified payment
  • You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.

 

3)      Second Lien Modification Program (2MP)

If your first mortgage was permanently modified under HAMP and you have a second mortgage on the same property, you may be eligible for a modification or principal reduction on your second mortgage as well.

 

4)      FHA Home Affordable Modification Program (FHA-HAMP)

FHA, VA and USDA all offer mortgage modification programs for struggling homeowners designed to lower monthly mortgage payments to no more than 31 percent of the homeowner’s verified monthly gross (pre-tax) income.  If you have a loan that is insured or guaranteed by the Federal Housing Administration (FHA), you may be eligible for a program offered through that government agency.

 

5)      USDA’s Special Loan Servicing

FHA, VA and USDA all offer programs for rural homeowners to lower their monthly mortgage payment to no more than 31 percent of their verified monthly gross income.  If you have a loan that is guaranteed by the USDA Section 502 Single Family Housing Guaranteed Loan Program, you may be eligible for a program through that government agency.

 

6)      Veteran’s Affairs Home Affordable Modification (VA-HAMP)

If you have loan that is insured or guaranteed by the VA, you may be eligible for a program through that government agency.

 

7)      Home Affordable Foreclosure Alternative Program (HAFA)

If you can’t afford your mortgage payment and don’t want to stay in your home, the HAFA program provides two options for transitioning out of your mortgage, through either a short sale or a Deed-in-Lieu of foreclosure.  In a short sale, the mortgage company allows you to sell your house for an amount which is less than the amount owed.  With a Deed-in-Lieu, the mortgage allows you to give the title back to the bank.  The benefits of using the HAFA program are:

 

  • Free advice from HUD-approved housing counselors and licensed real estate professionals
  • A HAFA short sale completely releases you from your mortgage debt after selling the property.  This means you will not be responsible for the difference between what is owed on the mortgage and the sales price.  The deficiency is guaranteed to be waived by the servicer.
  • HAFA has a less negative effect on your credit score than a foreclosure
  • When you close, HAFA may provide $3000 in relocation assistance.

 You may be eligible for HAFA if you meet all of the following criteria:

  • You have a documented financial hardship.
  • You have not purchased a new house within the last 12 months.
  • Your first mortgage is less than $729,750.
  • You obtained your mortgage on or before January 1, 2009.

 

8)     Second Lien Modification Program for Federal Housing Administration Loans (FHA-2LP)

If you have a second mortgage and your first mortgage servicer agrees to participate in FHA Short Refinance, you may be eligible to have your second mortgage on the same home reduced or eliminated through the FHA Second Lien Program (FHA2LP). If your second mortgage servicer agrees to participate, the total amount of your mortgage debt after the refinance cannot exceed 115 percent of your home's current value.

You may be eligible for FHA2LP if you meet the following criteria:

  • You are eligible for FHA Short Refinance.
  • You obtained your mortgage on or before January 1, 2009.
  • You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering or tax evasion in connection with a mortgage or real estate transaction.

 

9)     Home Affordable Refinance Program (HARP)

You may be eligible for HARP if you meet all of the following criteria:

  • The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  • The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  • The current loan-to-value (LTV) ratio must be greater than 80%.
  • The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.

You may be eligible for HARP if you meet all of the following criteria:

  • The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  • The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  • The current loan-to-value (LTV) ratio must be greater than 80%.
  • The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.
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10)    FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance)

If you're not behind on your mortgage payments but owe more than your home is worth, FHA Short Refinance may be an option that your mortgage servicer will consider. FHA Short Refinance is designed to help homeowners refinance into more affordable, more stable FHA-insured mortgage. If your current lender agrees to participate in this refinance, they will be required to reduce the amount you owe on your first mortgage to no more than 97.75 percent of your home's current value.

You may be eligible for FHA Short Refinance if you meet the following criteria:

  • Your mortgage is not owned or guaranteed by FHA, VA or USDA.
  • You owe more than your home is worth
  • You are current on your mortgage payments
  • You occupy the house as your primary residence
  • You are eligible for the new loan under standard FHA underwriting requirements.
  • You total debt does not exceed 50 percent of your monthly gross income
  • You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering or tax evasion in connection with a mortgage or real estate transaction.

 

11)     Home Affordable Unemployment Program (UP)

If you are unemployed, on your situation MHA's Home Affordable Unemployment Program (UP) may reduce your mortgage payments to 31 percent of your income or suspend them altogether for 12 months or more.  You may be eligible for UP if you meet all of the following criteria:

  • You are unemployed and eligible for unemployment benefits
  • You occupy the house as your primary residence
  • You  have not previously received a HAMP modification
  • You obtained your mortgage on or before January 1, 2009
  • You owe up to $729,750 on your home

 

12)    Hardest Hit Fund (HHF)

Early in 2010, the Treasury department announced that the Hardest Hit Fund would provide more than $7.6 billion in aid for homeowners in states hardest hit by the economic crisis.   These funds were used to develop programs to stabilize local housing markets and help homeowners avoid foreclosure.  Nevada is one of the states participating in this program.

 

 

 

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