The details of President Obama’s Home Affordable Modification Program have been released. The Treasury Department’s report includes eligibility requirements to determine which homeowners qualify for relief under the plan.
Following are the eligibility requirements as specified in the guidelines:
- Mortgage must have originated on or before January 1, 2009.
- Home must be an owner-occupied primary residence – No investment properties or second homes.
- Home must be a single family 1-4 unit property
- Home may not be vacant or condemned.
- Borrowers in bankruptcy are not automatically excluded from consideration.
- Borrowers in active litigation regarding the mortgage loan can qualify for a modification without waiving their legal rights.
- First lien loans must have an unpaid principal balance equal to or less than:
- 1 Unit: $729,750
- 2 Units: $934,200
- 3 Units: $1,129,250
- 4 Units: $1,403,400
- Foreclosure actions are suspended during the trial period or while borrowers are considered for alternative foreclosure prevention options. If homeowners fail to qualify, foreclosure proceedings may resume.
- No minimum or maximum LTV ratio for eligibility purposes.
- Loans are eligible for only one loan modification under the program.
- Subordinate liens are not included in the Front-End DTI calculation, but they are included in the Back-End DTI calculation.
- Servicers should follow any existing express contractual restrictions with respect to solicitation of borrowers for modifications.
Applicants will be accepted into the program until the programs expirations date of December 31, 2012
Remember, these guidelines our just an outline of the program so don’t disqualify yourself based on them. Consult a loan modification specialist who works with lenders on a daily basis to review your situation and determine whether you are likely to qualify. Sometimes the only way to determine whether you qualify is to actually submit your loan modification application.
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