Can we pay our mortgage?
Can we pay our mortgage?

The Making Home Affordable Plan is part of President Obama’s plan and is projected to help up to 9 million families restructure or refinance their mortgages to avoid foreclosure. 

2 of the Key Components:

  1. Refinancing for up to 5 million families unable to refi because of falling home values.
  2. $75 billion in incentives to loan servicers to provide loan modifications for an additional 4 million home owners.

Only conforming loans owned or securizited by Fannie Mae and Freddie Mac, this would include most conventional loans.  FHA and VA loans are currently not part of this program as they are being modified under other programs. 

How do you know if your loan if owned by Fannie or Freddie?  You can use the following numbers/websites to verify.

Fannie Mae:  1-800-7Fannie or

Freddie Mac:  1-800-Freddie or

Criteria For Refinance

  1. Property must be owner occupied.
  2. Borrower must have sufficient income to support the new mortgage debt.
  3. First mortgage cannot exceed 105% of the current market value of the property. (For example, if the property is worth $200,000, the borrower must owe $210,000 or less. 
  4. If there is a second the borrower may still qualify if the first does not exceed the 105% and the second lien holders agree to subordinate to the new first mortgage.
  5. No cash outs are allowed.
  6. Borrowers cannot be delinquent on their mortgage.

Modification Criteria

  1. Owner occupant in a one to four unit property.
  2. Unpaid principal balance for one unit property cannot exceed $729,750 (higher for mulitiple units.)
  3. Loan was taken out before January 1, 2009
  4. A mortgage payment (including taxes, insurance, and HOA dues) that is more than 31% of the borrower’s gross monthly income.
  5. Borrower must have experienced a significant change in income or expenses to the point where the current mortgage is no longer affordable.

These plans will not help borrowers who CAN make their payments but whose current property value is now less than what they owe.  The plan is to help those that are having problems making their payments in order to help them avoid foreclosures and therefore stabilize housing prices with less foreclosed properties.

If you would like more information on these programs please call me or visit