Home Affordable Modification Program (HAMP)

Learn all about the U.S. government's Home Affordable Mortgage Program (HAMP)


By Moe Bedard

By Moe Bedard

Founder at LoanSafe.org

My name is Maurice “Moe” Bedard. I am the founder of America’s #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications. Do you have a question and would like to ask a mortgage expert? Please join our forum at this link with thousands of other people and tell us your story.

What is the Home Affordable Modification Program (HAMP)?

The U.S. government’s mortgage assistance initiative is known as the “Home Affordable Modification Program,” and is more commonly referred to as HAMP. A HAMP loan modification is when your current mortgage that is held by Fannie Mae, Freddie Mac, FHA and or VA loan is modified by changing the terms to a more affordable monthly payment. This is normally done by lowering your interest rate, adding past due payments onto the mortgage balance and or extending the term length of your mortgage from say 30 years to 40 years.

HAMP is taxpayer funded through the Troubled Asset Relief Program (TARP). This program’s main goal is to help homeowners achieve an affordable loan by modifying their current interest rate on your mortgage so that your monthly payment is 38% of your gross monthly average income. In addition, homeowners, depending on their financial condition, may be eligible to receive $1,000 each year (for up to 5 years) that can be applied to a mortgage balance.


Who qualifies for the HAMP program?

In order to qualify for HAMP a borrower must:

1. Occupy the property as their primary residence;

2. Have a first mortgage payment that is greater than 31% of the borrowers gross monthly income

3. Have a mortgage balance that does not exceed $729, 750

4. Must be able to prove a financial hardship that is causing mortgage payments to be unaffordable

Once a borrower is pre-approved for this program they will be required to go through a three month trial period prior to receiving a permanent loan modification.

During this time the borrower will be making reduced payments until the servicer is ready to collect updated bank statements and pay-stubs to review their account for a final modification. Most servicers are extending the trial period much longer than three months due to the fact they are overwhelmed with modification requests.

If you would like to apply for the HAMP program you may want to first verify your lender  is participating in the program. Note that all mortgages backed by Fannie Mae or Freddie Mac are required to participate in program. You can find a list of all the documentation you will need to provide on the Making Homes Affordable website.

HAMP also provides a link to a useful tool, that borrowers can use to see if they pre-qualify for the program.