The Obama administration launched the “Making Home Affordable” initiative today, which will greatly improve the worry factors of an estimated 5 million qualifying homeowners. The Boston Globe has a bullet list of the plan’s main points. Among them:
• Interest rates can be lowered to as low as 2 percent and then if necessary, the term of the loan can be extended to a maximum of 40 years.
• The home must be a primary residence (verified with tax return, credit report, and other documentation such as a utility bill). The home may not be investor-owned.
• Borrowers must provide their most recent tax return and two pay stubs, as well as an “affidavit of financial hardship” to qualify.
• Borrowers are only allowed to have their loans modified once, and the program only applies for loans made on Jan. 1, 2009 or earlier.
• Homeowners are eligible for up to $1,000 of principal reduction payments each year for up to five years.
See more here.