There are two sub-plans to The Homeowner Affordability and Stability Plan. The first provides homeowners who lack sufficient equity the ability to refinance their loans. The second helps homeowners who have fallen behind on their mortgage payments the ability to modify their loans. Let’s take a look at them:

The Home Affordable Refinance:

For homeowners who have made timely payments on their existing mortgage that is owned by Fannie Mae or Freddie Mac. You may be eligible for this opportunity if you meet the following guidelines:

• You are current on your mortgage payment (if you’re not current, you may be eligible for The Home Affordable Modification)
• Your current mortgage is owned by Fannie Mae or Freddie Mac
• Your current mortgage balance is below $729,750 (for high-cost counties, such as Santa Clara, San Francisco, San Mateo…)
• Your 1-4 unit home is your primary residence
• The amount you owe on your mortgage is between 80.01%-105% of your home’s current value
• You have stable and verifiable income

Even though this program has been passed and will be available, the details for how loans will be priced have not yet been hashed out yet by Fannie Mae and Freddie Mac. From my understanding, Fannie and Freddie have until April 1st to determine guidelines and rules for pricing hits and policies. Once Fannie and Freddie determine these, they will communicate their requirements to banks, who will then in turn determine their own impacts.

If you fall into this category and want or need to take advantage of today’s historically low rates, I recommend contacting your mortgage professional immediately to complete a loan application. You should also gather any relevant financial documentation, such as:

• 1 month most recent paystubs
• 2008 W2s and most recent tax returns
• most recent bank/stock/retirement statements
• details about your current mortgage(s)

I will be happy to help you out with this refinance process and to keep you in the loop of any additional changes.

The Home Affordable Modification:

For homeowners who are struggling with their mortgage payments and have already fallen behind and missed 2 or more mortgage payments. To be eligible for this program, you must fall into the following guidelines:

• Currently own and occupy your 1-4 unit home
• Have a mortgage that is equal to or less than $729,750
• Have a loan that was originated before January 1, 2009
• Have a total housing payment (mortgage, taxes and insurance) that is more than 31% of your gross monthly income
• Have a mortgage payment that is no longer affordable due to a significant change in income or expenses (part of expenses could be an increase in your mortgage due to a scheduled interest rate change)

To take advantage of the Home Affordable Modification Program, you will need to contact your current service provider (the company that you make your payments to). A more detailed description of this program can be found by clicking here.

If you would like to speak to a HUD-approved housing counselor, contact 1-888-995-HOPE (4673)