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How to Do a Loan Modification

By , About.com Guide

7 of 7

Federal Government Loan Modification Guidelines

Loan application for loan modification

A loan modification can significantly reduce a mortgage payment.

© Big Stock Photo
The federal government, in an effort to streamline the loan modification process and establish wider participation among lenders, implemented The Federal Government Loan Modification (FHFA) Program on December 15, 2008. There is no termination date.

The following participants for FHFA include:

  • Fannie Mae
  • Freddie Mac
  • Federal Home Loan Banks
  • Wells Fargo
  • Department of the Treasury
  • Federal Housing Administration (FHA)
  • Federal Housing Finance Agency
  • HOPE Now lenders

Eligibility Requirements for the Federal Government (FHFA) Loan Modifications

The plan is to streamline loan modifications, which will lower mortgage payments for financially strapped home owners and help to sustain long-term home ownership.

  • Borrowers must be delinquent by three or more payments.
  • Property must be owner occupied as a primary residence.
  • Borrowers who have filed for bankruptcy are ineligible.
  • Borrowers must be able to afford a 38% PITI debt-ratio payment.

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