Making Home Affordable Program

The federal government’s Making Home Affordable (MHA) program is designed to help homeowners who are struggling to pay their mortgage. The program provides financial incentives to mortgage servicers if they modify first lien mortgages to lower the monthly payment.

In order to be eligible for the program, you must be a homeowner of a one-to-four unit home that was originated before January 1, 2009. Also, the current monthly mortgage payment must be greater than 31% of the borrower’s monthly gross income.

Home Affordable Modification Program - You can determine if your servicer is participating in the MHA's Home Affordable Modification Program (HAMP) by going to www.makinghomeaffordable.gov. The goal of HAMP is to lower monthly mortgage payments to a level that is less than 31 percent of your gross income. Your servicer may lower the interest rate to as low as 2 percent.  If lowering the interest rate doesn't lower the payment enough, your servicer may extend the term of the loan up to 40 years.  If the payment still isn't low enough, your servicer may consider deferring a portion of the unpaid principal balance. The deferred portion would still be owed, but repayment would be deferred until a later time.

Home Affordable Foreclosure Alternatives Program - The Home Affordable Foreclosure Alternatives (HAFA) program offers homeowners, their mortgage servicers and investors an incentive to complete a short sale or deed-in-lieu of foreclosure. Under HAFA, a homeowner must leave their house to transition to more affordable housing. These options are available for homeowners who: 1) do not qualify for a trial mortgage modification under HAMP; 2) do not successfully complete the trial period for a modification; 3) miss at least two consecutive payments during a modification; or 4) request a short sale or deed-in-lieu.

Second Lien Modification (2MP) Program - Some homeowners struggle to make their monthly mortgage payments because they have a second lien. Even when a first mortgage payment is affordable, the addition of a second lien can sometimes increase monthly payments beyond affordable levels. The 2nd Lien Modification (2MP) Program offers homeowners, their mortgage servicers, and investors an incentive for modifying a second mortgage to lower monthly payments. Servicers and investors may also receive an incentive for forgiving all of the second mortgage debt.  Since 2MP is meant to be complementary to HAMP, a homeowner must have their first lien modified through HAMP before the second lien can be modified under 2MP. 

Learn more about any of these programs at www.makinghomeaffordable.gov.