[jakelabry]

You have equity in your home. No bank is going to write down principle on a loan that you are not underwater on - they might as well just give you cash! People who are hundreds of thousands of dollars underwater (owe more than house is worth) can't get principle reductions. Also, almost all modifications require fully amortized payments - principle, interest, taxes, insurance, and sometimes HOA fees. So, yes - you have an extremely uphill battle. If your income doesn't or won't increase, can you sell the house? By all means, contact NACA and see what they say. I would say have a Plan B, though.