The home affordable modification program lenders 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 program allow homeowners to reduce significantly their interest rate, principal and term of their existing financially troubled mortgage.

The loan modification agreement option 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.

The home affordable 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.

1. Loans must have been started on or before January 1, 2009.


2. First-mortgage loans on properties occupied by owners with remaining principal 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 principal plus interest along with property taxes and homeowner insurance payments of the borrower are over 31% of their gross monthly family income.


6. All borrowers are required to document income, along with signed IRS 4506-T, proof of income i.e. paystubs or tax returns and are required to submit a signed affidavit of financial hardship along with the home affordable modification program application.


7. Owner occupancy status will be certified by borrower credit report and other documentation by the lender.


8. Lenders and servicers can qualify at risk borrowers who are still current on their payments but may be at looming risk of default.

The above guidelines apply for being eligible for loan modification and qualifying for an actual modification will depend upon the lender or servicer. This program will allow many borrowers to be eligible to modify their loan and take advantage of current lower mortgage rates. They can also refinance and convert an adjustable-rate mortgage into a more stable mortgage, such as a 30-year fixed rate loan.