Over the past year and a half millions of people have attempted to refinance or modify their home mortgages in order to help them stay in their home. Others have just taken advantage of the program in order to be able to refinance their home under better terms than might otherwise have been available. Our family is one of the latter, we were able to refinance our home mortgage and drop over a full point off of the interest rate. We saved over $200 a month off of our mortgage, and while we did have closing costs, they're already paid back 1 year later.
Since the program is still available, I thought I would briefly cover the details of who is eligible for each program – the refinance and modification programs.
Who Is Eligible For Home Affordable Refinance Program (HARP)
So who is eligible for the Home Affordable Refinance Program? According to the government site, people who meet these criteria:
- Own a one- to four-unit home that is your primary residence;
- Have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac
- Are current on your mortgage payments and have not been more than 30 days late making a payment within the past 12 months
- Have a first mortgage not exceeding 125 percent of the current market value of your home;
- Have income sufficient to support the new mortgage payments; and
- Can improve the long-term affordability or stability of your loan with the refinance.
Want to figure out if you're eligible? Go through this questionnaire and it will let you know. Eligible For A Refinance.
Who Is Eligible For Home Affordable Modification Program (HAMP)?
Others may be in more dire straights, and find that they need a loan modification. So who is eligible? According to the government site, to qualify for HAMP, you must:
- Own a one- to four-unit home that is your primary residence
- Have received your mortgage on or before January 1, 2009;
- Have a mortgage payment (including taxes, insurance, and homeowners association dues) that is more than 31 percent of your gross (pre-tax) monthly income; and
- Owe an amount that is less than or equal to $729,750 on your first mortgage for a one-unit property (there are higher limits for two- to four-unit properties).
MakingHomeAffordable.gov expands on the requirements:
Homeowners who qualify must complete a trial period of three or four months to demonstrate that they will be able to make their reduced payments on time before their mortgage will be permanently modified. To create an affordable payment, your mortgage servicer can lower your interest rate to as low as two percent, as well as extend your mortgage term up to 40 years, or forbear (defer) payments on your principal. A portion of the principal can also be forgiven, although that is optional on the part of the servicer.
So if you believe you can make the payments on your reduced and modified mortgage, the program may help you.
Several States Get Extra Help To Avoid Foreclosure
As of June 2010 several states that had greater than normal declines in average housing prices (greater than 20%) will see funding in the new “Hardest Hit Fund” of foreclosure prevention funding. Details:
State Housing Finance Agencies (HFAs) in Arizona, California, Florida, Michigan, and Nevada can begin to use $1.5 billion in “Hardest Hit Fund” foreclosure-prevention funding under plans approved today by the Obama Administration. This aid will support innovative local initiatives to assist struggling homeowners in those states, as part of the first round of funding available under this new program.
“These states have identified a number of innovative programs that will make a real difference in the lives of many homeowners facing foreclosure,” said Treasury Assistant Secretary for Financial Stability Herbert M. Allison, Jr. “While we've made important progress stabilizing the housing market and keeping responsible families in their homes, the Obama Administration will continue to do everything it can to help those who are struggling the most during this difficult time. Today marks an important milestone for delivering relief to homeowners through the Hardest Hit Fund program.”
If you live in one of the states above and are interested in the programs they now have available, check out this post for details.
Have you done a refinance or home loan modification under the Making Home Affordable Program? If so, did it go through, or have you experienced problems? Tell us about it in the comments!