The federal government recently released a new Mortgage Modification Program that attempts to make owning a home more affordable. Let’s take a look at the details of this plan, shall we?

Basics for Unemployed Homeowners
Unemployed homeowners will be able to qualify for up to six months of reduced payment. This can help you get back on your feet if you’ve recently lost your job. Also, during the time of reduced payment, you aren’t required to pay more than 31% of your monthly income toward the mortgage.

The federal government has stipulated that the mortgage rates balance must be under $729,750 for a borrower to qualify. Also, you must live in the home in question. Also, if one of the people paying off the mortgage is employed, and the other isn’t, then neither will be eligible if payments are under 31 percent of the total household income.

Most of the time, you’ll be required to furnish proof of unemployment, such as benefits records. If you become employed during this period, the amounts will go back up to the standard payment.

Lender Incentives and the FHA
The government is also creating incentives for lenders to reduce the principal for homeowners who are underwater. Remember, in order to qualify for a reduction in principal, your property has to be worth at least 15 percent less than the value of the mortgage.

Again, you’ve got to fit all of the qualifications listed above to earn these benefits. You can also find a way to refinance using FHA loans and reduce your principal in this manner. The FHA is a great resource for people who want to refinance at reasonable rates.