Loan Modifications

Many regulations apply to the terms of loan modifications of homes and modifications are regulated by the Department of Housing and Urban Development (HUD). These rules determine what fees can be included, the amount of the interest rate, what information is used to set the terms of the modification.

HARP Overview and Eligibility

One modification program offered by the Federal Government is the Home Affordable Refinance Program. Successful loan modifications can offer borrowers significant long term savings on their mortgages and allow them to keep their homes despite their financial hardships.

HARP helps current borrowers unable to refinance due to declining property values. HARP makes payments more affordable and may replace adjustable rate mortgage with a fixed-rate mortgage. This program may allow you to reduce amortization in order to build equity. The Eligibility requirements are as follows:


  • Is owner-occupant of a 1-4 unit property
  • Is current on the mortgage
  • Has reasonable ability to pay the new mortgage payment
  • Loan:
  • Owned or guaranteed by Fannie Mae or Freddie Mac
  • First mortgage cannot exceed 125% of property’s current market value
  • Refi must improve affordability or sustainability
  • HAMP Overview and Eligibility

HAMP modifies 1st lien mortgages for eligible borrowers to achieve more affordable payments. They help borrowers keep their homes and reduce the impact of foreclosures on the community. HAMP provides financial incentives to borrowers who make timely payments. The eligibility requirements are as follows:


  • Is owner-occupant of 1-4 unit property
  • Has sufficient documented income to support the modified payment
  • Has financial hardship and is delinquent or at risk of imminent default
  • Loan:
  • Amount owed on first mortgage equal to or less than $729,750
  • Mortgage originated on or before January 1, 2009
  • First mortgage payment (PITI & homeowner association/condo fees) is greater than 31% of borrower’s gross income

Read more about Loan Modifications.

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