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Making Home Affordable Plan

The “Making Home Affordable” plan is meant to offer assistance to homeowners by making their mortgages more affordable and reducing the negative impact that foreclosures have on families as well as the economy as a whole.

There are two elements to the Home Affordable Plan:

• The Home Affordable Refinance
• The Home Affordable Modification

The Home Affordable Refinance Program

This helps people with a perfect payment history with their existing mortgage owned by Fannie Mae or Freddie Mac. The borrowers usually have problem with refinancing as the value of their homes have come down and this increases the loan-to-value ratios to more than 80%. With the help of the Home Affordable Refinance program, such borrowers will be eligible to refinance their loan and benefit from the lower mortgage rates of today or even refinance an adjustable-rate mortgage into a more stable mortgage.

Since the borrower’s information is already on file with the GSE lenders and services, the whole process does not take too long. In some cases, appraisal may also be not required. This sort of a flexibility makes refinance less expensive and quicker for borrowers as well as lenders. This program is valid up to June 2010 and is made available to about 4 or 5 million homeowners.

The Home Affordable Modification Program

There are many homeowners who struggle to make their monthly mortgage payments, either because of a significant increase in mortgage payments or because of a reduction in income since the loan has been taken or even due to increased expenses such as medical bills.

This program is to help homeowners at risk of foreclosure with a reduction in their monthly mortgage payments. This program will work in conjunction with the Hope for Homeowners program.

Homeowners will now be able to afford their payments. The eligibility criteria for this program include homeowners with loans that have been taken on or before 2009; owner-occupied or first-lien properties with up to $729,750 in unpaid balance of the principal amount. The limit can be increased for owner occupied properties that have between 2 to 4 units. Even borrowers who have already missed a couple of payments may be eligible.

Borrowers have to show complete documentation of their income, signed IRS 4506-T, two recent pay slips, recent tax returns, as well as a signed affidavit of financial problems.

The concerned authorities will first double check on the occupancy of property owner status through borrower credit report and other documents. No vacant, condemned or investor owned properties are accepted.

This program will go on up to Dec 31, 2012; however, each homeowner can modify their loans only once under this program. This is said to benefit between 2-3 million homeowners.


With the Making Home Affordable Plan underway across the country, with thousands of loan modification and refinance programs, the program is said to be on track and all set to meet its intended goals over the next several years. Struggling homeowners in every state now benefit from the ability to stay in their homes and reduced monthly mortgage payments. This plan is seen to be having a great impact in areas that were hard hit by the housing crisis.

Tags: check, credit, finance, Income, loan, mortgage, risk, tax

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