The loan modification plan has been in the market since a long time and many home owners have tried to benefit from the plan. But because of some reason or the other many home owners have failed to qualify for the plan. The economic downturn led to serious financial after effects which put home owners in a precarious situation and on the verge of losing their homes. However, with the introduction of the making home affordable program by the Obama administration those home owners got a second chance to save their home from foreclosure. As per the newly introduced making home affordable program guidelines a home owner who has failed with the loan modification program can re-apply to the making home affordable program but only if they meet certain set guidelines.

The best part about the making home affordable program of the Obama administration is that it requests all banks to at least go through all the applications of the home owners and then decide which application meets the making home affordable program guidelines before approving the application. The Obama making home affordable program can be applied even though you have been rejected the loan modification plan earlier.

The two parts of the same program are the home affordable modification program and the home affordable refinance program. Both the programs aim at reducing the monthly mortgage payments for the home owners so that they can afford it with their existing income. The basic point that is changed in both the home affordable modification program and the home affordable refinance program is that the monthly mortgage loan payment owed to the lenders should be reduced to 31% of the gross monthly income of an individual so that a home owner is capable of taking out cash and paying off the lenders without compromising on their basic necessities. The home affordable modification program requires an individual to prove that the mortgage was taken on ones primary residence, that the loan amount owed is equal to or less than $729,750, and that the existing mortgage loan owed is more than 31% of the gross monthly income of the home owner.

The benefits acquired from the home affordable modification plan is reduction of interest rates to 2% or extension of loan repayment period by up to 40 years and principal forbearance till the home is sold or refinanced. The federal making home affordable program requires one to fill the application accurately with all details and relevant documents so that after analysis of the application the bank cannot reject it.

Similarly to apply for the home affordable refinance program one has to qualify for it by meeting certain guidelines such as primary residence on which the mortgage loan has been taken, if the loan is guaranteed by Fannie Mae or Freddie Mac and so on.