Home Affordable Modification Program (HAMP): FAQs

The Home Affordable Modification Program (HAMP) is a foreclosure prevention program designed to assist homeowners in refinancing the existing mortgages on their properties. Here are some frequently asked questions:

How Do I Know if I Am Eligible for the HAMP Program?

Only your servicer can tell you if you are eligible; however, if you meet the following requirements, you may be eligible:

  • You are the owner-occupant of a 1- to 4-unit residence.
  • Your unpaid principal balance can be no more than
                $729,750 for 1 unit,
                $934,200 for 2 units,
                $1,129,250 for 3 units or
                $1,403,400 for 4 units.
  • You have a first lien mortgage that was originated on or before January 1, 2009.
  • Your monthly mortgage payment is more than 31 percent of your monthly gross income.
  • You cannot afford your mortgage payment due to a financial hardship that can be documented.

Can I Get a Loan Modification if I Am Unemployed? 

No, however, you may qualify for the Home Affordable Unemployment Program (UP), which provides a suspension or reduced monthly mortgage payment for a temporary amount of time. If you are currently in the trial period of the HAMP program and just lost your job, you can request to be considered for the UP program. If you have already received a permanent loan modification and become unemployed, you will not be eligible for UP.

Do I Need to Be behind on Payments to Get My Loan Modified?

No. All a homeowner needs is to reasonably believe that default on his or her mortgage is imminent. This could be due to factors such as unemployment or a foreseeable increase in the rate. You will be asked to provide documentation of the change in your circumstances that is going to affect your ability to make your mortgage payments on time.

Will My Interest Rate Change during the Term?

Your modified rate is set below market and will be fixed for 5 years. Thereafter, it will increase 1 percentage point a year until it reaches the market rate. The market rate at the time of your modification agreement sets the maximum rate your loan can reach. Your rate will never go above this rate.

How Much Does the HAMP Modification Cost?

There is no fee to participate in the HAMP program, and beware of anyone who requires you to pay a fee for counseling services or a modification fee on your delinquent loan. HUD-approved housing counselors provide services at no cost to you. You will have to pay any owed back taxes; however, your lender will give you the option to include the amount you owe with your mortgage payment, or you can opt to pay them in advance.

Will the HAMP Modification Affect My Credit?

On a monthly basis, your servicer must report the status of your mortgage and payments to the credit reporting agencies. If you have remained current on your mortgage payments, your servicer will report your mortgage account as current and identify your loan as "modified under federal government plan." If you have fallen 30 or more days delinquent on your mortgage payment prior to your loan modification trial period, your servicer will report this as well as identifying your loan as "modified under federal government plan."

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