Home Affordable Modification Program (HAMP)
President Obama’s Home Affordable Modification Program (HAMP), which is part of his larger initiative to make waves in home affordability. This program allows you to keep your home and live in it too.
The government program makes available $75 billion in funding to help 3-4 million homeowners at risk for foreclosure stay in their homes.
HAMP allows eligible mortgagees lower their monthly payments to 31% of their pre-tax income, or lower, through a loan modification. Modifying the home loan must equal net more value than foreclosing would.
The adjustments are introduced on a temporary basis but are made permanent after the homeowner makes three on-time payments. The HAMP programs offers up thousands of dollars in incentive payments to both the lenders, homeowners and mortgage investors.
To quality for HAMP, you must:
- Occupy your home as a primary residence;
- have a monthly mortgage payment that is greater than 31% of pre-tax monthly income;
- have a loan amount that is not greater than $729,750–the current Fannie Mae and Freddie Mac loan limits; and
- be unable to afford your current payment.
- A mortgage on a multi-unit property may be eligible for loan modification if the owner is living in one of the units as a primary residence.
And as an added incentive, homeowners who pay their modified loan payments on time for five years may be eligible for a $5000 credit applied to reduce principal debt on their first mortgage.
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