Question:

Am I eligible for the Obama mortgage relief plan?

Answer:

The Obama mortgage relief plan is a $75 billion program that aims to resuscitate and stabilize the housing markets. The Obama home mortgage assistance program is also known as the Making Home Affordable Plan. It has two components: the Home Affordable Refinancing Program and the Home Affordable Modification Program.

Eligibility Requirements of the Home Affordable Refinancing Program

Obama's mortgage refinancing program aims to help people refinance their homes. If you want to refinance to avail of lower interest rates or better terms, the Home Affordable Refinancing Program is for you.

If you meet the following conditions, you may be qualified for the refinancing component of Obama's mortgage relief plan:

  • The amount you owe on your first mortgage is less than or equal to 125 percent of the current market value of the mortgaged property.
  • Refinancing will make your loan payments more manageable. Refinancing should make your monthly mortgage payments affordable or must make your loan more stable (say, if you refinance from a variable-rate mortgage to a fixed-rate mortgage).
  • You have a "current" borrower status. No monthly mortgage payment should have been late in the past 12 months. No payment should have been missed if your mortgage is less than 1 year old.
  • You have a demonstrated ability to meet projected refinanced mortgage payments. You should have sufficient income (supported by proof of income documents) to meet future payments.
  • Freddie Mac or Fannie Mae owns or has guaranteed your loan. Contact your loan servicer or the company to which you make mortgage payments to find out if this applies to your loan.
  • The mortgaged home can be multi-unit (up to 4 units only).

Eligibility Requirements of the Home Affordable Modification Program

The Obama mortgage relief plan can also give homeowners an alternative to foreclosure. If you are finding it hard to meet your monthly mortgage dues, the Home Affordable Modification Program is for you.

If you meet the following conditions, you may be qualified to apply for a loan modification under the Obama home mortgage assistance program:

  • Your monthly mortgage dues comprise more than 31 percent of your pre-tax monthly income. Monthly mortgage dues include interest payments, payments toward the principal, insurance premiums, taxes, fees to home associations, etc.
  • The amount you owe your mortgage lender should be no more than $729,750 for a 1-unit home. Multiple-unit homes have higher ceiling values.
  • Your monthly mortgage dues are no longer affordable due to financial difficulties (e.g. disability, sickness, income reduction, job loss) or a change in your mortgage interest rates. Supporting documents will be required.
  • You have a demonstrable ability to meet future payments in case your loan modification application is approved.
  • Your first mortgage should be dated on or before the 1st of January, 2009.
  • The mortgaged property may be a single- or multi-unit property (up to 4 units). The property (or one of the units in case of a multiple-unit property) must be your primary residence.
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