The federal government has launched a number of programs to help homeowners faced with the threat of foreclosure
The nation’s housing crisis generated an unprecedented number of home foreclosures across the country. One of the few silver linings to this huge dark cloud was the creation of a number of federal programs aimed at assisting homeowners in these efforts to avoid losing their home to foreclosure. If you are facing the challenge of avoiding home foreclosure, one or more of these, federal programs may be able to assist you.
Home Affordable Modification Program (HAMP)
The Home Affordable Modification Program (HAMP) was the most notable federal response to the most recent foreclosure crisis. The program was designed to help reduce the monthly mortgage payment of eligible 
homeowners by deferring part of the principle mortgage. Under HAMP, homeowners are responsible for paying the deferred portion only after the principal has been paid off.
To be eligible for assistance under HAMP:
- Your loan must be owned by Fannie Mae or Freddie Mac, or the loan is administered by a servicer participating in the Making Home Affordable program and the servicer is granted permission by the owner of the loan to modify it
- You obtained your mortgage on or before January 1, 2009
- You owe up to $729,750 on your primary residence or single unit rental property
- You owe up to $934,200 on a 2-unit rental property; $1,129,250 on a 3-unit rental property; or $1,403,400 on a 4-unit rental property
- The property has not been condemned
- You have a financial hardship and are either delinquent or in danger of falling behind on your mortgage payments (non-owner occupants must be delinquent in order to qualify)
- You have sufficient, documented income to support a modified payment
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction
In June 2012, the Obama Administration expanded the population of homeowners that may be eligible for the Home Affordable Modification Program to include:
- Homeowners who are applying for a modification on a home that is not their primary residence, but the property is currently rented or the homeowner intends to rent it
- Homeowners who previously did not qualify for HAMP because their debt-to-income ratio was 31% or lower
- Homeowners who previously received a HAMP trial period plan, but defaulted in their trial payments
- Homeowners who previously received a HAMP permanent modification, but defaulted in their payments, therefore losing good standing
If you are a homeowner who falls into any of these criteria, you may be eligible for a modification under the expanded criteria. (For more information regarding HAMP, click here.)
Home Affordable Refinance Program (HARP)
Some homeowners are unable to refinance due to depreciated home values in the current economy. The HARP program helps affected homeowners secure refinancing for a more manageable mortgage payment.
If you're not behind on your mortgage payments but have been unable to get traditional refinancing because the 
value of your home has declined, you may be eligible to refinance through HARP. HARP was designed to help you get a new, more affordable, more stable mortgage. HARP refinance loans require a loan application and underwriting process, and refinance fees will apply.
You may be eligible for HARP if you meet all of the following criteria:
- Your mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae
- Your mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009
- Your mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
- The current loan-to-value (LTV) ratio of your mortgage must be greater than 80%
- You must be current on the mortgage at the time of the refinance, with a good payment history record for the past 12 months
(For more information regarding HARP, click here.)
Home Affordable Foreclosure Alternatives (HAFA)
In some cases, a homeowner's mortgage is simply unmanageable. If you fall into this category and would prefer to move to a home that is more affordable without foreclosing on your current home, this program may be able to help.
HAFA provides two options for transitioning out of your mortgage: a short sale or a Deed-in-Lieu (DIL) of foreclosure. In a short sale, the mortgage company lets you sell your house for an amount that falls "short" of the amount you still owe. In a DIL, the mortgage company lets you give the title back, transferring ownership back to them.
With either option, HAFA offers benefits that make the transition as favorable as possible:
- You can get free advice from HUD-approved housing counselors and licensed real estate professionals
- Unlike conventional short sales, a HAFA short sale completely releases you from your mortgage debt after selling the property (this means you will no longer be responsible for the amount that falls "short" of the amount you still owe as any deficiency is guaranteed to be waived by your mortgage servicer)
- In a HAFA short sale, your mortgage company works with you to determine an acceptable sale price
- HAFA has a less negative effect on your credit score than foreclosure or conventional short sales
- When you close, HAFA may provide $3,000 in relocation assistance
You may be eligible for HAFA if you meet all of the following criteria:
- You have a documented financial hardship
- You have not purchased a new house within the last 12 months
- Your first mortgage is less than $729,750
- You obtained your mortgage on or before January 1, 2009
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering or tax evasion in connection with a mortgage or real estate transaction
(For more information regarding HAFA, click here.)
Home Affordable Unemployment Program (HAUP)
If you are unemployed and, depending on your situation this program may reduce your mortgage payments to 31 percent of your income or suspend them altogether for 12 months or more. You may be eligible for HAUP if you meet all of the following criteria:
- You are unemployed and eligible for unemployment benefits
- You occupy the house in question as your primary residence
- You have not previously received a HAMP modification
- You obtained your mortgage on or before January 1, 2009
- You owe up to $729,750 on your home
(For more information on HAUP, click here.)
In addition to these programs, the U.S. Department of Housing and Urban Development (HUD) can be a powerful tool for homeowners who need help avoiding home foreclosure. Your local HUD office can:
- Help you find qualified mortgage counselors
- Help you find additional federal assistance for avoiding foreclosure
- Help you report foreclosure scams
- Help you find affordable housing
Veterans
If you are an active or retired service member, a survivor or a spouse of a veteran, there are a number of assistance program available for you. If the home you are trying to save from foreclosure was purchased with 
the use of a Veterans Administration (VA) loan, there are some specific steps that can be taken to help you avoid foreclosure. You also have expanded access to counseling and support services from qualified counselors who can direct you to all of the programs you are eligible for. Contact you local VA office to start getting the support you have earned.
(For more information on VA housing assistance and counseling services, click here.)
Each federal program has specific rules and regulations regarding the amount of assistance offered and who can qualify. Federal programs for avoiding home foreclosure can help ease the financial and emotional burden you are experiencing. Reply! can help by putting you in contact with real estate professionals in your area who will be more than willing to help you.