Avoid Foreclosure with Affordable Housing Options
Learn more about various Making Home Affordable programs
In the wake of a financial crisis that was forcing millions of homeowners into foreclosure, the Obama Administration initiated the Making Home Affordable Act in February 2009. The Act is an overarching name for a series of programs designed to help homeowners restructure, refinance or responsibly exit mortgages that are at risk for foreclosure.
Qualifying for refinancing under the Making Home Affordable Act
There are different qualifications for each of the government-implemented affordable housing programs under the Making Home Affordable Act. For borrowers who are up-to-date with their mortgage payments but owe more than their homes' current value, there are refinancing options available. The main refinancing alternatives differ based on whether or not one of the top two investors in the secondary mortgage market, Fannie Mae or Freddie Mac, guarantees or backs the loan.
- For loans guaranteed by Fannie Mae or Freddie Mac: Homeowners who are looking to refinance but are struggling due to fallen home value can explore options under the Home Affordable Refinance Program.
- For loans that are not guaranteed by Fannie Mae or Freddie Mac: Homeowners may able to refinance with an FHA Short Refinance. Borrowers interested in this program will have to inquire about availability with their individual lenders because participation is voluntary.
Qualifying for affordable housing programs when you're delinquent on your current loan
Homeowners who are delinquent or falling behind on loan payments have options for principal reductions. The Principal Reduction Alternative program is designed to help borrowers with loans not backed by Fannie Mae or Freddie Mac. Those who qualify will have to prove financial hardship with income documentation.
More affordable housing options through the Making Home Affordable Act
In addition to refinancing and debt reduction options, the Making Home Affordable Act offers solutions for homeowners who are facing unemployment or have a second mortgage. If you are struggling to make your loan payments, you may want to consider lien modification or temporary payment reduction programs. Explore the Making Home Affordable Act website or call your lender directly to discuss the options that best apply to your needs.
Using the Making Home Affordable Act to exit your loan responsibly
If moving forward with home ownership is no longer an option financially, one of the Making Home Affordable programs might be able to help you avoid foreclosure. The Home Affordable Foreclosure Alternatives program, for example, includes short sale and deed-in-lieu of foreclosure alternatives that forgive the balance of a mortgage loan after a sale.
Apply for affordable housing options at Citizens Bank
Whether you need information about your current mortgage or would like information about affordable borrowing options, Citizens Bank can help. Speak with a helpful Home Loan Advisor about your situation and what affordable mortgage loan options may be available to you.