Making Home Affordable Program

Getting the real estate housing market back on track is a big challenge today and part of President Obama’s strategy to make it happen is through the Making Home Affordable Program. Approximately 9 million families could be eligible to refinance or modify their current loan for a payment that would be more affordable, both now and in the future.

Through the Home Affordable Refinance Program, Fannie Mae and Freddie Mac allow borrowers to refinance their mortgage loans. Some of the requirements in order to be eligible include:

• You are the owner occupant of a one to four unit home
• The loan on your property is owned or securitized by Fannie Mae or Freddie Mac
• At the time you apply, you are current on your mortgage payments (current means that you haven’t been more than 30-days late on your mortgage payment in the last 12 months or, if you have had the loan for less than 12 months, you have never missed a payment)
• You believe that the amount you owe on your first mortgage is about the same or slightly less than the current value of your house
• You have income sufficient to support the new mortgage payments
• The refinance improves the long term affordability or stability of your loan

In order to know if a refinance will improve the long term affordability or stability of your loan, ask your lender to give you a “Good Faith Estimate.”This will help you determine your new interest rate, mortgage payment and the amount you will pay over the life of your new loan. You can compare this to your current loan terms. If it is not an improvement, refinancing may not be right for you.

You should also consider that refinancing from an adjustable rate to a fixed rate loan or eliminating higher risk loan terms (such as interest only payments or balloon payments) may also provide long term stability.

In order to know if your loan is owned or securitized by Fannie Mae or Freddie Mac, call your mortgage lender and ask about the program. Both Fannie Mae and Freddie Mac have established toll-free telephone numbers and web submission processes to make this data available. For Fannie Mae, call 1-800-7FANNIE or www.fanniemae.com/loanlookup. For Freddie Mac, call 1-800-FREDDIE or www.freddiemac.com/mymortgage. Borrowers will provide or enter information to determine if either agency owns or securitized the loan. This information is not a guarantee of eligibility for the refinance program, as other qualifying criteria must also be met.

If you owe more than the property is worth, consider a couple things. Eligible loans will include those where the first mortgage will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less on your first mortgage you may qualify. The current value of your property will be determined after you apply to refinance.

This entry was posted on Wednesday, April 1st, 2009 at 5:30 pm and is filed under Real Estate Industry News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.