Are All Home Loans Eligible To Be Modified?

There are several restrictions regarding home loan modifications. One of them is that not all home loans are eligible to be modified.

In order to qualify for the loan modification program under the Making Home Affordable plan, a homeowner must adhere to several restrictions regarding what home is available. First and foremost, the home has to be owner-occupied. If the mortgage holder lives in the property that is the subject of a potential loan modification, you have passed the first criteria. A loan modification attorney will let you know exactly what criteria must be met in order to become qualified for a home loan modification.

Secondly, the mortgage on the home must have been created on or before January 1, 2009. Plus, the balance on that mortgage cannot exceed $729,750 for a single-family home.

An exception can be made on owner-occupied residences that go up to four units. If you live in a multi-unit property, the restriction on the mortgage size is $934,200 for a two-unit home, $1.129 million for a three-unit home and $1.403 million for a four-unit home. It is important to contact a real estate attorney to help you become more aware of the possible exceptions and other ways to get your home loan modified.

Lastly, the mortgage payment (including taxes and insurance) must exceed 31 percent of your monthly gross income. There are other restrictions, but these are what apply to what homes are eligible for a loan modification.

You have plenty of time to make your decision - just apply for the MHA Plan loan modification by December 31, 2012.