The Making Home Affordable Program

The Making Home Affordable Program is part of the Obama Administration’s broad, comprehensive strategy to get the economy and the housing market back on track. Part of that strategy is Loan Modification. Simply put, Loan Modification restructures the mortgage so that payments are more affordable for the homeowner and helps save the home from foreclosure. Loan modifications help homeowners who are struggling to keep their loans current or who are already behind on their mortgage payments.

Generally speaking, you may be eligible if you:

  • Are the owner-occupant of a one- to four-unit home
  • Have a first lien mortgage that was originated on or before January 1, 2009
  • Have a monthly mortgage payment (including taxes, insurance, and home owners association dues) greater than 31% of your monthly gross (pre-tax) income,
  • Have a mortgage payment that is not affordable due to a financial hardship that can be documented.

If you are eligible, Bridge Street Development Corporation housing counselors will work with you and your servicer to bring your payments down to 31% of your gross income.

Your mortgage may be restructured using one of the following methods:

  • Lower the interest rate.
  • Extend the term. If an interest rate reduction does not result in a payment that is affordable your loan may be modified with an extended payment term of up to 40 years.
  • Forbearance (defer) principal. If your payment is still not low enough, your servicer may defer a portion of the principal amount you owe until the maturity of the loan. This is called a principal forbearance. With a forbearance you will still owe the principal, but repayment is deferred until a later date.