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Making Home Affordable Mortgage Refinance & Modification Program
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I’ve been hearing a lot about the government’s Making Home Affordable mortgage refinance program. Having looked at refinancing our mortgage a few months ago, but not pulling the trigger, I was interested to see if we could benefit from this program (we can’t, but that’s not a bad thing). It’s designed to help people get more favorable loan terms in scenarios where their home has lost value. A lot of lenders won’t refinance a loan if the value of your home is less than the loan amount, it’s simply a matter of math; this program looks to help alleviate some of that.
This program, introduced by the Obama Administration as part of the Financial Stability Plan, is estimated to help 7 to 9 million people. They estimate the Home Affordable Refinance Program will help 4 to 5 million and the Home Affordable Modification Program will help 3 – 4 million. What this means is that you should act quickly if you want your application processed quickly. The longer you wait to apply, the larger the backlog will grow, so let’s get to the program!
What is the Making Home Affordable Program?
There are two parts to the program. The first is Home Affordable Refinancing, which helps borrowers refinance a loan backed by Fannie Mae or Freddie Mac. It’s designed for people who are current on their mortgages and are unable to refinance because the value of their home has fallen by too much. The second part of the program is Home Affordable Modification, which assists in the modification of a loan, rather than a refinance. It’s designed for people who are “struggling to make their monthly mortgage payments.”
Making Home Affordable Eligibility
Home Affordable Refinancing: The first rule is that your loan has to be backed by Fannie Mae or Freddie Mac, which you can confirm on their websites (Fannie Mae Loan Lookup, Freddie Mac Loan Lookup). If you’re uncomfortable looking it up online, you can call Fannie Mae at 1-800-7FANNIE and Freddie Mac at 1-800-FREDDIE, 8AM to 8PM Eastern Standard Time).
Next, use the government’s website to determine your eligibility by answering this 4-question qualification form. I can save you some time, if you answer NO to any of the four questions, you’re not eligible for Home Affordable Refinance.
Home Affordable Modification: You aren’t required to have your loan backed by Fannie Mae or Freddie Mac for Home Affordable Modification, so you can skip that step and go straight to the 5-question qualification form. Again I can save you some time, if you answer NO to any of the five questions, you don’t qualify.
I Qualify, Now What?
Call the bank or mortgage lender that owns your mortgage and ask them for the Home Mortgage Refinance or Modification program application. You’ll need the following (I’d call for the application and then start collecting this information):
- Information about your mortgage, such as your monthly mortgage statement and
- Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources.
- Your most recent income tax return.
- Information about any second mortgage or home equity line of credit on the house.
- Account balances and minimum monthly payments due on all of your credit cards.
- Account balances and monthly payments on all your other debts such as student loans and car loans.
Are you looking to take advantage of this program?
(Photo: orvaratli)
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There is hope. I live in Iowa, out in the country. My original mortgage amount with Countrywide was $60,000. My loan originated in 2006 and my loan amount was $565 at 7.5%. I applied for the program last JUNE and immediately (during my initial call), my payment was reduced to $325.00. I followed all the guidelines; providing documentation quickly and it was December 29th that I received FedX documents with approval. My new mortgage payment is $221, interest rate 2% for first 5 years with 1% yearly increments until it maxes out at 5% permanently for the life of the loan, which was stretched to 40 years. My loan payment will never go beyond $350.00. There is a small balloon payment due in FORTY YEARS, but I am quite sure that circumstances will change by then. FOR NOW, THIS WONDERFUL PROGRAM ALLOWED ME TO STAY IN MY HOME. I am so extremely thankful.
In addition, I would like to add that IT TOOK TIME AND PATIENCE ON MY END. For many months, it seemed like nobody was doing anything (and maybe they weren’t)….but, I kept making my adjusted payment of $325.00, which again totally helped my monthly outgo.
Remember: Squeeky wheel gets the grease! Keep calling your lender. In the end, I think they new me by first name.
(I also sent a thank you card. 
Yeah Emily and Congrats!! I am sure you are the only one who has thought of sending a “thank you” card!! I thought that was great! And it is the “squeaky wheel” that does seem to get the grease and I am glad it worked for you!
Marie,
I just took my paperwork to my bank. They have a notary that can sign/date the paperwork. Yes, I believe it is on the last page of the documents. I had them sign both copies.
I went though the trial payment of $755. Sent in all documents, and the permanent payment they want is $840, which is still not affordable. Bank of America also added on $4,000 to my principal even though I paid their trial payment every month. The only thing they were willing to do for me is to cut the interest rate. I wish they would take off the additional $4,000 principal and extend the loan to 40 years. That would make the payment affordable.
Hi Wanda,
If this is still not affordable for you…you need to contact the lender and explain this to them. They should look at other options for you. I don’t know of the consequences of not “accepting” their 1st and only offer but it might be worth your time to talk with them before finalizing for modification. Good luck, Darla