Making Home Affordable: loan modification and refinance details from the US Treasury

Posted by Michael DiMella on Wed, Mar 04, 2009

Details on Obama's "Making Home Affordable" plan were released today be the Treasury.  I wrote a detailed post about the announcement and the loose guidelines of the plan a couple of weeks ago in Obama unveils new $75 billion foreclosure prevention plan.  Now the Treasury has released (some) further details, so I wanted to pass those along as well.

The plan is expected to help as many as 7 to 9 million homeowners to either refinance or modify their loans.  If you are wondering if you're eligible for either of those options under the program, the government has a site at  with two self assessment tools to determine if you are eligible:

Am I eligible for a "Making Home Affordable" REFINANCE?

Do I qualify for a "Making Home Affordable" MODIFICATION?


UPDATE (MARCH 20): The government recently launched a new site that's full of great resources about the loan modification and loan refinance programs at: I suggest checking this site out first for more info on the program and to find out if you are eligible.


There were a lot of details and guidelines about the loan modification program for delinquent borrowers (available for an expected 3 - 4 million "at risk" borrowers already late on payments), but not as much detail for the refinance program available for the expected 4 - 5 million "on time" but close to underwater borrowers.  I may have missed something reading through the documents quickly, but here is a basic summary of the refinance program if you are paying on time, but have not been able to refinance to a lower rate because you don't have 20% or more in equity:

The Home Affordable Refinance program will be available to 4 to 5 million homeowners who have a solid payment history on an existing mortgage owned by Fannie Mae or Freddie Mac. Normally, these borrowers would be unable to refinance because their homes have lost value, pushing their current loan-to-value ratios above 80%. Under the Home Affordable Refinance program, many of them will now be eligible to refinance their loan to take advantage of today’s lower mortgage rates or to refinance an adjustable-rate mortgage into a more stable mortgage, such as a 30-year fixed rate loan.  GSE lenders and servicers already have much of the borrower’s information on file, so documentation requirements are not likely to be burdensome. In addition, in some cases an appraisal will not be necessary. This flexibility will make the refinance quicker and less costly for both borrowers and lenders. The Home Affordable Refinance program ends in June 2010.

We do know that only conforming loans backed by Fannie Mae and Freddie Mac for owner occupied homes are eligible for the refinance program, and that loans can be refinanced at up to a max of 105% of the home's value.  The documents go on to say that Fannie Mae and Freddie Mac will be issuing guidelines to lenders to allow them to refinance loans under this program immediately but no word on the specific details of who exactly is eligible (yet).  It seems like the assumption is if you're on time and you income qualify for the payments you should be able to refinance up to 105% of the home's value, but basically, the advice given is: "call your lender".  They should have more detailed guidelines soon.

UPDATE: Use these phone numbers or websites to determine if your loan is owned or securitized by Fannie or Freddie (one of the requirements for eligibility):

For Fannie Mae, 1-800-7FANNIE (8am to 8pm EST).

Freddie Mac, 1-800-FREDDIE (8am to 8pm EST)


For more details (long, boring details I should say!) on the program components:

Detailed Summary of the Obama Housing Plan (pdf from the National Asso of Realtors)

Making Home Affordable loan modification summary of guidelines (pdf)

Making Home Affordable frequently asked questions (pdf)


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Tags: mortgage, politics