HAMP - Home Affordable Modification Program

HAMP is a loan modification program that helps troubled homeowners by reducing their Mortgage payments so that these payments are 31% of their pre-tax monthly income.

Homeowners facing a major financial hardship that could lead to foreclosure may work with a lender to get a loan modification. To do this, the lender may allow the homeowner to refinance the loan, pay a lower interest rate, extend the term of the loan, skip payments and add them to the total loan amount or roll past-due payments into the total loan amount.

HAMP helps trouble homeowners by reducing their mortgage payment so that these are 31% of their pre-tax monthly income. You can use this calculator for an estimate.

Qualify for HAMP

  1. Have your mortgage prior to Jan 1, 2009
  2. Owe maximum of $729,750 on your primary residence
  3. Owe single-unit rental property up to $934,200 (Government sets higher limits for rental properties with more units)
  4. Have enough documented income that you could pay your mortgage if it is modified.
  5. Have a financial hardship that would put you in danger of being delinquent or are currently delinquent.
  6. To show hardships, they must be a serious financial hardship such as a loss of income, illness, or a divorce that puts them at a risk of defaulting.
  7. They must prove their hardships with documentation and sign an affidavit to that effect. Click here for full list of eligibility criteria.

Effects of Loan Modification on Credit

Those participating in HAMP probably won’t see a dip in their credit score, as the government has set up requirements that lenders report HAMP in such a way that it doesn’t harm your credit score. However, there is no guarantee that a loan modification in general won’t impact your credit score.