What's the plan
- There are two new programs that will provide relief to many homeowners.
- One focuses on refinancing the loan and the second focuses on loan modification program
- Refinanced home is the primary residence
- Can finance only up to 105 percent of current market value
- Mortgage is owned or guaranteed by Fannie Mae or Feddie Mac
- The mortgage is conforming (that is, less than $417,000 if in Chicago area)
- Mortgage payments are current
- Enables some qualified borrowers to refinance at lower interest rates even if their property is worth less than their mortgage
- Home is the primary residence
- Mortgage totals less than $729,750 if it's a single family home
- Loan originated prior to January 1, 2009
- Borrower is at risk of defaulting on mortgage, may be delinquent
- Loan may only be modified and adjusted one time under this program
- Creates a repayment plan to reduce payment to 31% of gross income
- Changes the payment terms of the mortgage
- May modify the interest rate as low as 2 percent, increase the term up to 40 years, and/or reduce the principal
- Reduced payment terms effective for 5 years
- After 5 years, interest may increase a maximum of 1 percent a year
- Borrowers who pay on time are rewarded with a $1,000 yearly reduction in principal for up to 5 years
- Get the details to see if you are qualified to participate
- Go to HUD.gov and follow the links to FinancialStability.gov
- Gather the documents and information listed on the financial stability website
- For additional guidance, work with a HUD-approved housing counselor. Do not pay a third part for help.
