Mortgage relief programs and their eligibility criteria

Barack Obama has introduced home affordable programs in order to help the homeowners to refinance or restructure their existing mortgage loans. The homeowners can take help of such a mortgage relief program to avoid foreclosures on their homes. Read this article to know about these relief programs and the required eligibility criteria.

Home Affordable Modification Program (HAMP)

You can take help of Home Affordable Modification Program (HAMP to make your monthly mortgage payments affordable. You can qualify for the program even if you’re current on your home loan.

However, you need to fulfill the eligibility criteria in order to take advantage of this mortgage relief program. The eligibility criteria are given below.

• Primary residence – The property must be your primary residence and you should presently live in it.
• Time of loan origination – The mortgage should have originated before January 1, 2009. You can also take help of this program if you take out a mortgage loan before December 31, 2012.
• Unpaid mortgage balance – The unpaid balance on your mortgage loan needs to be equal to or less than $729,750 for a single-family home.
• Monthly mortgage payment - Your monthly home loan payment should be more than 31% of your pre-tax (gross) monthly income.
• Affidavit of financial hardship – You’ll have to provide an affidavit of the financial hardship letter that explains that you’re having trouble to pay back your mortgage loan. It could be due to the increase in monthly mortgage payments, reduction in your income or you have suffered a hardship.

Home Affordable Refinance Program (HARP)

Home Affordable Refinance Program (HARP) will benefit you if you’re not able to refinance your mortgage to a lower rate of interest because the property value has decreased. With the help of this program, you can also convert your adjustable rate mortgage to a fixed rate home loan.

In order to take help of HARP, the mortgage loan should either be owned or guaranteed by Freddie Mac or Fannie Mae. Go through this section to know about the qualifying factors that you need to satisfy in order to take help of this mortgage relief program.

• Outstanding mortgage balance – Your outstanding mortgage balance should not exceed 125% of the present market value of your home.
• Type of property – The property can be a condominium, triplex, duplex, 4-unit residence or a detached house.
• Current on payments – You should be current on mortgage payments, that is, you’ve not been delinquent on your mortgage payments for more than 30 days in the past 12 months.

Apart from above, there is HOPE for Homeowners (H4H) Program that aims to help the homeowners (who have defaulted or are at risk of default and foreclosure) to refinance their existing mortgage into an affordable one. However, the loan must be insured by the FHA (Federal Housing Administration) and you should have taken out the mortgage on or before January 1, 2008. With the help of this mortgage relief program, you can refinance your mortgage loan into a new 30-year fixed rate mortgage with comparatively lower monthly payments.