MHA Program for Distressed Homeowners Extended

The Making Home Affordable (MHA) program was introduced by the U.S. Department of the Treasury in April 2009 and has recently been extended through December 31, 2016. Broadly, the program aids homeowners who struggle to pay their mortgage payments and who lack the equity to refinance. The MHA program includes the Home Affordable Refinance Program (HARP) and the Home Affordable Modification Program (HAMP), among other options.

HARP allows homeowners with loans guaranteed or owned by Fannie Mae and Freddie Mac who are underwater on their loans to refinance into mortgages with lower interest rates. Through HARP, over 3.1 million homeowners have refinanced their loans. Nearly a quarter of all refinances were part of the HARP program in the first quarter of 2014.

HAMP is designed to aid homeowners who can no longer afford their home loan payments and took out a loan before January 1, 2009 that is owned, insured, or guaranteed by Fannie Mae, Freddie Mac, the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA) or the U.S. Department of Agriculture (USDA). Upon showing evidence of financial hardship and on-time loan payments during a trial period, HAMP has enabled over 1.3 million homeowners to permanently modify their mortgage loans. Homeowners save roughly a third of their monthly mortgage payments, or $544.

Both HARP and HAMP work to reduce the number of foreclosures, which fell to the lowest level since 2005 in May 2014. Recently, military resources for military homeowners and families who are permanently displaced by a job-related move have been incorporated into the MHA program.