HAMP Eligibility Requirements: Do You Qualify?

If you're having serious problems with your mortgage payments, you'll definitely want to know about HAMP eligibility requirements. HAMP stands for Home Affordable Modification Program and is operated by two federal government departments – the U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development (HUD). It's designed to provide practical assistance to those who face foreclosure, whether that's an imminent danger, or one that's still a little way off.

Between September 2008, when HAMP was established, and August 2015, 3,578,227 foreclosure prevention actions have been completed, including 1,857,562 permanent loan modifications, according to the Federal Housing Finance Agency. So this is a big program, and there's a good chance it could help you. But first you need to discover whether you qualify under the current HAMP eligibility requirements.

Does Your Mortgage Qualify?

The first hurdle to overcome isn't your personal eligibility, but that of your mortgage. It must meet two initial criteria:

  1. Only loans that were closed on or before January 1, 2009 are eligible for HAMP.
  2. Your mortgage must be owned, guaranteed or securitized by Freddie Mac or Fannie Mae, or your loan servicer must be a participant in the program.

There's a good chance you won't know who owns your mortgage. Or you may even feel certain that neither Freddie nor Fannie does. Don't give up at this stage. Mortgages are traded on a secondary market all the time, and it's quite likely yours has been sold one or more times without your knowing – possibly to one of those two government-sponsored enterprises.

Because this is such a common issue, both Freddie and Fannie have online tools to allow you check whether they own your mortgage. Visit those tools on this Fannie website page and this Freddie website page. If you prefer to find out by phone, the helpdesk numbers are 1-800-7FANNIE and 1-800-FREDDIE respectively, and both are open from 8:00am to 8:00pm (ET). If neither owns yours, you can discover whether the company that does is a participant in the program online: check this list. Better yet, just call your loan servicer and ask.

More Rules About Your Mortgage and Property

There are a few other rules, including:

  • The loan has to be a "first-lien" mortgage, meaning it's not a second mortgage, often a home equity loan or home equity line of credit.
  • It can have been modified before, but that can't have been under HAMP. You get only one bite at this cherry.
  • The property is a single family dwelling, or a 1- to 4-unit multi-family property comprising "primary residences," meaning each unit is someone's main home .
  • It's not your vacation home nor one you rent out just for vacations.
  • But in some circumstances it may be one you rent out year-round.
  • It's not been left empty or abandoned, and it hasn't been condemned.

By the way, those with FHA and VA loans may be eligible for help under two similar programs, FHA-HAMP and VA-HAMP, which have additional guidelines.

Do You Meet the HAMP Eligibility Requirements?

If you dread filling in financial forms because you're used to your money problems excluding you, this is going to make a refreshing change. Not only are most of those issues unlikely to be a problem – they're possibly a requirement. To meet some of the key criteria, you must:

  • Not be eligible for a refinance. (But, if that excludes you, find out more about the Home Affordable Refinance Program (HARP).)
  • Be looking at long-term hardship. In other words, your current financial problems aren't going away anytime soon.
  • Be 60 days or more behind with your mortgage payments, OR
  • If you're not yet 60 days behind (you may even be current), be in a situation where that seems inevitable quite soon.
  • Be spending more than 31 percent of your actual gross (pre-tax) monthly income on housing expenses.

You may still be eligible for help, even if you're in bankruptcy or foreclosure or are in dispute with your lender. For those in the most extreme cases, a simplified, fast-track solution may be available in the form of a Streamline HAMP Modification.

One Last Hurdle

As you'd expect with a government program, very little is taken on trust. You're going to have to provide documentary evidence for pretty much every assertion you make on your application.

And, also as you'd expect with a government program, these applications can each take a long time to process. So it's important you don't create a bottleneck yourself. Get together now all the paperwork you think you might possibly be required to produce. There's no point in being eligible if it takes you forever to prove it.

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