Do You Qualify for the Making Homes Affordable Initiative?
On March 4, 2009, the Treasury Department issued new guidelines and created the Making Homes Affordable Initiative, part of which includes a program to modify loans, called the Home Affordable Modification Program. If your lender can service your loan under the Home Affordable Modification Program, you may be able to reduce your monthly payment to 31% of your gross monthly income for five years. Additionally, if you make all payments on time during each of those five years, you may receive $1000 principal reduction per year.
Approximately four million qualifying homeowners will be able to take advantage of this plan. Are you one of them? To qualify, you must meet the following criteria:
1. The home must be your primary residence.
2. The principal balance on your home must not be greater than $729,500.
3. You must have obtained the loan prior to January 1, 2009.
4. You can only modify your loan once, and it must be done prior to January 1, 2013.
5. You must complete and submit certain documentation.
Lenders have until the end of this year to sign up with the Treasury Department to service loans under this program. If they do, they will receive a number of benefits, including financial assistance from the government to help defray the cost of the modification. If you believe you qualify for a mortgage modification, you should find out if your lender is participating in the Home Affordable Modification Program.