SM

Help for 

America’s 

Homeowners

Making Home Affordable

Act Now to Get the Help you Need 
• There is no charge to apply for the Obama 

Administration’s Making Home Affordable Program.

• Assistance from a HUD-approved housing 

counselor is FREE.

• Beware of anyone who asks you to pay a fee in 

exchange for counseling or a loan 

modification.

• Beware of anyone who pressures you to sign 

papers immediately.

• Do not sign your deed over to anyone or make 

a mortgage payment to anyone other than 

your mortgage servicer without seeking your 

servicer’s approval directly.

Beware Of Foreclosure Rescue Scams 

Help Is Free!

MAKING HOME AFFORDABLE

The Obama Administration’s Making Home 

Affordable Program is a critical part of the 

effort to stabilize the housing market and help 

struggling homeowners get relief and avoid 

foreclosure.

Making Home Affordable includes 

opportunities for homeowners to modify 

or refinance their mortgage to make their 

payments more affordable. The program has 

recently been expanded to help homeowners 

who are unemployed or “underwater” (they 

owe more on their mortgage than their 

home is worth). It also provides options for 

homeowners who can no longer afford their 

home and are interested in a short sale or 

deed-in-lieu of foreclosure.

There is no charge to apply for the Making 

Home Affordable Program. If you are struggling 

to pay your mortgage, you should contact 

your mortgage servicer—the company to 

which you pay your mortgage—to determine 

if you qualify for the program. A HUD-approved 

housing counselor can also work with you for 

free to help you determine if you are eligible 

and help you apply for the program. 

Visit MakingHomeAffordable.gov or call 1-888-995-HOPE (4673) 1
Home Affordable Modification Program (HAMP)

Many homeowners are struggling to make 

their mortgage payments on time perhaps 

because their interest rate has increased or 

they have less income. HAMP reduces a 

homeowner’s monthly mortgage payment to 

31 percent of their verified gross (pre-tax) income 

to make their payments more affordable.

To qualify for HAMP, you must:

• Own a one- to four-unit home that is your 

primary residence;

• Have received your mortgage on or before 

January 1, 2009;

• Have a mortgage payment (including principal, 

interest, taxes, insurance, and homeowners 

association dues) that is more than 31 percent 

of your gross (pre-tax) monthly income; and

• Owe an amount that is less than or equal to 

$729,750 on your first mortgage for a one–unit 

property (there are higher limits for two– to 

four– unit properties).

Homeowners who qualify for HAMP must 

complete a trial period of three or four months 

to demonstrate that they will be able to make 

their reduced payments on time before their 

mortgage will be permanently modified. To 

create an affordable payment, your mortgage 

servicer applies a series of modification steps in 

the following order:

1. rate reduction to as low as two percent;

2. term extension up to 40 years; and

3. principal forbearance (or deferral).

A portion of the principal can also be forgiven, 

although that is optional on the part of the 

servicer.

The modified interest rate will be fixed for a 

minimum of five years as specified in your 

modification agreement. Beginning in year 

six, the rate may increase no more than one 

percentage point per year until it reaches the 

Freddie Mac Primary Mortgage Market Survey 

rate (essentially the market interest rate) at the 

time your permanent modification agreement 

was prepared.

For every month a homeowner makes a payment 

on their permanent modification on time, they 

can accrue an incentive of $1,000 each year to 

reduce the amount of principal they owe, up

to $5,000.

Visit MakingHomeAffordable.gov or call 1-888-995-HOPE (4673) 2
Second Lien Modification Program (2MP)

Many homeowners may be struggling to 

make their monthly mortgage payments 

because they have a second lien. 2MP offers 

homeowners a way to lower payments on their 

second mortgage. 

Under 2MP, if your first-lien mortgage was modified 

under HAMP and your second-lien mortgage 

servicer is a participant in 2MP, then your second-lien 

mortgage servicer may:

• Reduce the interest rate to one percent for 

second liens that pay both principal and 

interest (amortizing); 

• Reduce the interest rate to two percent for 

interest-only second liens; 

• Extend the term of the second lien to 40 years;

• If the principal was deferred (through forbearance)

on the first lien, a servicer must forbear the same 

proportion on the second lien; 

• If the principal was forgiven on the first lien, 

a servicer must forgive the same proportion 

on the second lien; although a servicer may, in 

its discretion, forgive a larger portion or all of 

the second lien and will receive incentives for 

doing so.

As an alternative to a modification of the second 

lien, a 2MP participating servicer may elect 

to extinguish (forgive) your second lien in its 

entirety, in accordance with an investor servicing 

agreement.

Visit MakingHomeAffordable.gov for a complete 

list of participating servicers.

Home Affordable Refinance Program (HARP)

Some homeowners may be able to pay 

their mortgages on time, but are not able to 

refinance to take advantage of today’s low 

interest rates perhaps due to a decrease in the 

value of their home. HARP assists homeowners 

whose mortgages are current and held by 

Fannie Mae or Freddie Mac refinance into a 

more affordable mortgage.

You may be eligible for HARP if you:

• Own a one- to four-unit home that is your 

primary residence; 

• Have a mortgage owned or guaranteed by 

Fannie Mae or Freddie Mac;

• Are current on your mortgage payments and 

have not been more than 30 days late making 

 a payment within the past 12 months;

• Have a first mortgage not exceeding 125 

percent of the current market value of your home;

• Have income sufficient to support the new 

mortgage payments; and

• Can improve the long-term affordability or 

stability of your loan with the refinance.

To find out if you have a mortgage held by

Fannie Mae or Freddie Mac: 

• Fannie Mae: FannieMae.com/loanlookup or 

1-800-7FANNIE (Monday - Friday, 8 a.m. to 8 p.m. ET) 

• Freddie Mac: FreddieMac.com/mymortgage or 

1-800-FREDDIE (Monday - Friday, 8 a.m. to 8 p.m. ET)

Visit MakingHomeAffordable.gov or call 1-888-995-HOPE (4673) 3
Expanded Help for Homeowners who are 

Unemployed or Underwater

On March 26, 2010, the Obama Administration 

announced new program expansions to help 

homeowners who are struggling to pay their 

mortgage due to unemployment or because 

they are “underwater” (they owe more on their 

mortgage than their home is worth). 

Unemployment Program 

Beginning August 1, 2010, all mortgage servicers 

participating in the Making Home Affordable 

Program will provide eligible homeowners a 

forbearance period during which their monthly 

mortgage payments are reduced or suspended 

while they seek re-employment. The minimum 

forbearance period is three months, although 

a mortgage servicer may extend the term 

depending on applicable investor and regulatory 

guidelines. 

Unemployed borrowers must be receiving or 

eligible for unemployment benefits and may not 

be more than three months past due on their 

mortgage when they apply for unemployment 

forbearance.

Principal Reduction Alternatives for Homeowners

who are Underwater

Beginning in the fall of 2010, mortgage servicers 

are required to evaluate every homeowner with 

high negative equity (they owe more than 115 

percent of the value of their home) to determine 

if they can reduce the amount a homeowner 

owes to achieve an affordable monthly mortgage

payment. However, please note that although a 

servicer is required to evaluate the borrower for 

a HAMP modification which includes principal 

reduction, it is not obligated to actually modify 

the loan with principal reduction. Under this 

program, homeowners earn principal reduction 

over a three-year period by successfully making 

payments in accordance with the modified loan 

terms.

These programs are not currently available for 

homeowners with mortgages held by Fannie Mae 

or Freddie Mac.

For more detailed information about these programs, 

please visit MakingHomeAffordable.gov.

Visit MakingHomeAffordable.gov or call 1-888-995-HOPE (4673)

Home Affordable Foreclosure Alternatives 

Program (HAFA)

Some homeowners may feel that they can no 

longer afford their home, but want to avoid the 

negative effects of foreclosure. The HAFA Program 

offers homeowners, their mortgage servicers, 

and investors incentives for completing a short 

sale or deed-in-lieu of foreclosure. HAFA enables 

homeowners to transition to more affordable 

housing while being released from their 

mortgage debt.

Short Sale: In a short sale, the servicer allows 

the homeowner to list and sell the mortgaged 

property with the understanding that the net 

proceeds from the sale may be less than the total 

amount due on the first mortgage. 

continued 

4
Visit MakingHomeAffordable.gov or call 1-888-995-HOPE (4673)

Home Affordable Foreclosure Alternatives

Program (HAFA) (Continued)

Deed-in-Lieu of Foreclosure: Generally, if the 

borrower makes a good faith effort to sell the 

property but is not successful, a servicer may 

consider a deed-in-lieu of foreclosure. With a 

deed-in-lieu, the borrower voluntarily transfers 

ownership of the property to the servicer— 

provided the title is free and clear.

These options are available for homeowners who:

• Do not qualify for a trial payment plan 

which is required prior to a permanent HAMP 

modification; 

• Do not successfully complete the trial payment 

plan;

• Miss at least two consecutive payments during 

HAMP modification; or 

• Request a short sale or deed-in-lieu of 

foreclosure.

Under the program, a homeowner can receive 

$3,000 to help with relocation costs after a 

successful short sale closing or deed-in-lieu. If 

there are liens and encumbrances in addition 

to the first mortgage, the borrower must obtain 

lien releases from those creditors—under 

HAFA, homeowners can receive up to $6,000 of 

assistance to release those liens.

TAKE ACTION TODAY

• To learn more about the Making Home

Affordable Program, visit 

MakingHomeAffordable.gov.

• Contact your mortgage servicer—

the company to which you pay your 

mortgage— to determine if you qualify.

• Call 1-888-995-HOPE (4673) for 

information about the Making Home

Affordable Program and to speak with

a HUD-approved housing counselor

for free. If you are having difficulties,

call the hotline and ask for “MHA Help”.

• Respond quickly to requests for 

information by your mortgage servicer. 

They will only be able to help if they 

have all of the information they need.

• Be cautious of scams. There is no charge 

to apply for the Making Home Affordable 

Program. Beware of anyone who asks you 

to pay a fee in exchange for counseling 

or a mortgage modification.

5
SM

Visit MakingHomeAffordable.gov

or call 1-888-995-HOPE (4673)

073010