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3 HAMP Program Alternatives You Should Know About

Updated on:
Content was accurate at the time of publication.

The Home Affordable Modification Program (HAMP), created in 2009 by the federal government, made it possible for struggling homeowners to stay afloat by modifying the original terms of their mortgage loans. The program ended in 2016, but other mortgage modifications programs have cropped up. These alternative programs offer support for at-risk homeowners who face difficulties paying their mortgages.


What is HAMP?

The Home Affordable Modification Program (HAMP) was created in 2009 after the Great Recession. It offered financial relief to homeowners who were at risk of losing their homes because they couldn’t pay their monthly mortgage.

The program modified the terms of qualified applicants’ mortgages to help them afford their home loan payments. Eligible borrowers were required to enroll in a three-month trial program. After they paid the modified amount for this set period, they could enter into a permanent agreement.

Families typically reduced their monthly payments by more than $530 a month until the program expired on Dec. 30, 2016.

3 HAMP program alternatives to consider

The HAMP program ended in 2016, but homeowners in financial stress can turn to several alternatives. The three mortgage modification programs listed below are compatible with conventional and government-backed mortgages, and can help borrowers who are struggling to meet their monthly payments.

Mortgages backed by Fannie Mae and Freddie Mac and federally backed loans from the U.S. Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA) all offer alternatives to HAMP.

Loan modification program What assistance does it offer?Who can use it?
FHA loan modificationAllows for the use of a partial claim up to 30% of the unpaid principal balance as of the date of default combined with a loan modificationCurrent FHA loan borrowers
Fannie Mae/Freddie Mac Flex ModificationReduces mortgage payments (principal and interest reduction) by 20%, and may include a lower interest rateConventional mortgage holders with a Fannie Mae- or Freddie Mac-owned loan
VA loan modificationAllows you to add the missed mortgage payments and related legal costs to your loan balance, plus new mortgage payment schedule is setCurrent VA loan borrowers

FHA loan modification

The FHA Home Affordable Modification Program is designed to help financially struggling FHA loan holders by reducing the cost of their home loans. The program modifies mortgages by extending the loan term, adding late payments to the principal balance and reducing the interest rate on the loan. FHA also allows mortgage borrowers to access a “partial claim” option, reducing the unpaid principal balance by up to 30%.

FHA loan modification requirements include:

You may not have qualified for any other mortgage assistance programs.

You must have a maximum front-end DTI ratio of 31% and a back-end DTI ratio of 55%.

You must complete a three-month payment plan trial, depending on whether you’re in default or imminent default.

Unfortunately, the FHA HAMP program has been temporarily suspended until October 31, 2024 with the exception non-borrowers who acquired title through an exempted transfer. Read more information on the HUD government website.

Fannie Mae and Freddie Mac Flex Modification

If you hold a conventional mortgage via Fannie Mae and Freddie Mac, you may qualify for their Flex Modification program. This program is aimed at helping conventional mortgage borrowers keep their homes out of foreclosure. It can help borrowers who are delinquent on their mortgage, including imminent default loans where the homeowner is current or less than 60 days late on payments.

If you use a Flex Modification program, you may be able to extend your mortgage term to 480 months. The program may result in reduced monthly principal and interest payments. To be eligible for the Flex Modification program, the mortgage being modified must be a conventional loan.
Other requirements are:

The mortgage must be 60 days or more past due or in imminent default.

The mortgage must have originated 12 months before applying for Flex.

The borrower must meet the hardship criteria.

The borrower must have a stable verified income to support a monthly payment.

The borrower’s mortgage cannot be already in a forbearance or repayment plan (unless directed by Fannie Mae).

The mortgage loan must not have been modified three or more times in the past year.

VA loan modification

If you have a VA loan that you are struggling to pay, the VA loan modification program could help you keep your home. This program allows outstanding past-due amounts to be added to your outstanding principal balance, and then you can be put on a new payment schedule for your home loan. In some instances, you may be able to reduce your monthly payment by extending your home loan up to 360 months (30 years) if the extension is 120 months (10 years) or less from the original maturity date.

The program’s requirements include:

Your VA loan must be in default, but you have recovered from the temporary hardship that caused it.

You have made 12 monthly payments since you closed on your first mortgage.

You can prove you can support the payment of a modified VA loan.

You have not modified your VA loan in the past three years.

Understanding the HAMP vs. HARP program

The Home Affordable Refinance Program (HARP) was created by the federal government to help borrowers who found themselves owing more than their homes were worth. HARP, which expired in 2018, allowed these “underwater” homeowners to refinance into more affordable mortgages with lower payments and interest rates.

While borrowers could refinance their mortgages under HARP, HAMP allowed borrowers to modify their mortgages to have lower monthly payments. As previously mentioned, HAMP expired in 2016.

Allowed borrowers to modify their original mortgagesAllowed underwater borrowers to refinance their mortgages into one with a low interest rate
Monthly ​​payments equaled no more than 31% of your monthly gross income.Lower monthly payments
Late payments could be tacked onto the amount owed on the mortgageBorrowers didn’t need to have much equity in their home
Expired in 2016Expired in 2018

What are your other mortgage relief options?

If you are struggling to make your mortgage payments but don’t qualify for one of the above HAMP alternatives, here are some other types of mortgage relief programs available:


Mortgage forbearance allows you to suspend or reduce your mortgage payments for a period of financial hardship. First, you must directly talk to and arrange a repayment agreement with your lender. When the period of hardship agreed upon is over, you will be required to pay back what you owe your lender, either by making small, monthly payments or one lump sum.


Most refinances are done when homeowners want to take advantage of lower interest rates and the equity in their homes. However, in forbearance cases, it may be possible for you to talk to your lender about refinancing your existing mortgage into a new, less costly monthly payment.

High-LTV refinance.

If you have a conventional loan through Fannie Mae or Freddie Mac, you could be eligible for a high-LTV refinance. Your loan-to-value (LTV) ratio must be too high for a standard refinance to qualify. The ratio range of the required LTV ratio for both programs is 75.01% (3 or 4 units) to 97.01% (one unit). As of April 12, 2022, however, this program is on hold due to low volume, according to Fannie Mae.

Repayment plan.

If you are struggling to make payments on your mortgage and you have fallen behind, you may qualify for a repayment plan from your mortgage lender. Under this type of assistance, you agree to repay the amount owed over a specific period to bring the mortgage current. A repayment plan option is a good choice if you don’t qualify for a HAMP alternative and you are at serious risk of falling into foreclosure.