Home Modification Program Hamp Program Eligibility

Home Modification Program – HAMP Program Eligibility

By: - Mortgage - November 18, 2011
home modification program hamp program eligibility

If you are a homeowner who has gotten behind on your mortgage or who is expecting to soon be facing foreclosure, there are some programs available through the US government that can help. There are two types of home modification program choices out there from the Obama administration. The first, called HAMP, which is the focus of this article, is for homeowners who have missed payments or at risk of foreclosure. The second option is for home owners who are fine with making their payments, but they cannot refinance because the value of their home is below the market value.

The acronym HAMP stands for “Home Affordable Modification Program”. This program is designed to be a rescue method for homeowners who are under water or treading water when it comes to making their mortgage payments. Under the terms of this home modification program, homeowners who are eligible will be able to modify they terms of their mortgage to payments that are easier for them to handle. Though this may sound like the perfect solution for you, and it actually may be, not everyone will qualify for this assistance.

When it comes to HAMP program eligibility there are several qualifying factors that you must meet as a homeowner. The first of these is you must have had your mortgage done before January 1, 2009. Secondly, the home you are falling behind on must be your primary dwelling and the amount of the mortgage must be less than $729,500. Another HAMP program eligibility factor is that you must fully disclose your income along with your tax returns and copies of your pay stubs. Finally, you must sign a financial hardship statement and if you are a homeowner whose total debt is more than 55% of your income, you must attend free, government sponsored credit counseling.

If you meet all of the HAMP program eligibility factors, your lender will determine how much they can reasonably lower your payment each month. They will target this payment to be about 31% of your monthly pre-tax income. You can also get an interest rate of as low as 2%. You will pay no fees whatsoever if you are accepted into this program for the modification, but you may have to make a balloon payment at the end, especially if your lender reduced the principal payment each month.

There are some more benefits to this option for homeowners in addition to the ability to easier meet your mortgage payments. One of these benefits is the free credit counseling you may be eligible for. If this is offered, which it may be as a requirement of the home modification program, you should try to get as much as you can out of it. This type of counseling will only help you in the future. Another great benefit of this program is that you will get an incentive from the US Department of the Treasury that lowers the principle on the loan. That can certainly add up over time.

You should keep in mind, when you use this program to refinance your mortgage it is only good for five years. Additionally, you only have until the end of 2012 to qualify for HAMP program. If you are interested in applying for the program, getting in contact with your lender is the best option. If you want more information on this and other programs, you can get information, forms and get contact information at the official site Makinghomeaffordable.gov.  It is important to note, that even if you match each and every one of the base qualifiers, you still make not be approved, especially if you are close to not matching one. The thing to do, as mentioned above is to contact your lender for specifics on this program.