What Is the Government Standard on Home Modification Loans?

A loan modification changes the terms and conditions of your existing home loan. A modification can make your mortgage payment more affordable, but certain requirements must be met for approval.

Types

To qualify for a home loan modification, the home must be your primary residence. Loan modifications are available for homes with one, two, three or four units. If your home has more than one unit, you must be the owner and live in one of the units.

Size

To qualify for a modification, your outstanding mortgage balance should be equal to or less than $729,750 for a one-unit property. The balance requirement for two-, three- and four-unit properties is $934,200; $1,129,250; and $1,403,400, respectively.

Time Frame

According to Makinghomeaffordable.gov, to qualify for a modification your existing mortgage must have originated on or prior to Jan. 1, 2009.

Significance

To qualify for a government standard mortgage loan modification, your existing mortgage payment must be more than 31 percent of your monthly gross income. That payment includes principal, interest, taxes and insurance.

Considerations

Your mortgage does not need to be past due to qualify. You may qualify if you believe there could be a reduction in your income or if you are experiencing some other hardship.

References

• Makinghomeaffordable.gov: eligibility