Who Qualifies for the Obama Mortgage Refinancing Program?
There has been a lot of press on what many people call the Obama Mortgage. But what IS an Obama Mortgage and who is eligible?
In early 2009, the Obama administration announced a program called Making Home Affordable. This program is expected to help nine million homeowners keep their homes and avoid foreclosure through refinancing and modified loans designed to lower monthly mortgage payments.
The Obama mortgage is not part of the Hope for Homeowners program started in 2008. Making Home Affordable does offer hope for homeowners in need of mortgage rescue, but there are specific conditions for the program. Do you wish to apply for refinancing under Making Home Affordable?
- You must be current on your mortgage payments. Those who hope to take advantage of programs under a 2008 or 2009 housing rescue bill soon learn that staying current on your mortgage is often one of the first requirements. That’s one reason financial advisors tell people not to default or stop paying their mortgages. To qualify for an Obama Mortgage you must not have been more than 30 days late on any mortgage payment in the last 12 months.
- Your home must be your primary residence. For those in need of homeowner’s relief with FHA loans, this is a very familiar condition, but for those in conventional loans, the “primary residence” requirement may be new. Those who don’t live in the building they seek refinancing for will not be approved for an Obama mortgage.
- Your home must be financed with either a Fannie Mae or Freddie Mac loan. If you aren’t sure if your home loan meets this requirement, contact your loan officer or call 1-800-Freddie or 1-800-7FANNIE to learn more.
- Normally, home owners with loan-to-value ratios above 80% are not eligible for refinancing, but Home Affordable gives homeowners affected by such loan-to-value ratios a second chance; you may be eligible to refinance into lower mortgage rates and stable interest rates if you qualify. The Home Affordable refinance program’s official site asks, “Do you believe that the amount you owe on your first mortgage is about the same or less than the current value of your house?” If so, you qualify for refinancing rather than loan modification.
If you meet these conditions, your next step should be to contact your loan officer to ask about starting the application process. You will need all information about your current loan, any second mortgage plus other lines of credit like credit cards or personal loans. You’ll also be asked to supply your most recent tax documents as part of the process of applying for an Obama mortgage refinancing package.
Legislation is pending to help those who have FHA and VA loans get similar homeowner relief as those who have Fannie Mae and Freddie Mac loans under Home Affordable, but as of now those with FHA and VA loans should ask their lenders what alternative options are available since the Obama mortgage is not designed for FHA and VA borrowers.
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