The loan modification program has been planned to help save struggling homeowners to evade default if they are in impending danger of defaults and prevent foreclosure. Home loan modification or mortgage modification allow homeowners to reduce significantly their interest rate, principal and term of their existing financially troubled mortgage.

The Federal home affordable modification program lender has set industry standards for approval guidelines and a customary process used to evaluate home loan modification applications. These standard guidelines and methods are meant to help borrowers self verify their eligibility and also give information on what all is required when filling up the application form.

1. Loans must have been started on or before January 1, 2009.
2. First-mortgage loans on properties occupied by owners with remaining balance up to $729,750 for one unit.
3. Higher limits of $934,200 for a duplex, $1,129,250 for a triplex and $1,403,400 for a 4 unit home.
4. All borrowers with loans owned or guaranteed by Fannie Mae and Freddie Mac are eligible.
5. The existing loan amount of the borrower is over 31% of their gross monthly income.
6. All borrowers are required to document income and are required to submit a letter of financial hardship along with the home affordable modification program application.