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Lender Tables
The lenders whose rates and other terms appear on this chart are ICBs advertising partners they provide their rate information to our data partner RateUpdatecom Unless adjusted by the consumer advertisers are sorted by APR lowest to highest For any advertising partners that do not provide their rate they are listed in advertisement display units at the bottom of the chart Advertising partners may not pay to improve the frequency priority or prominence of their display The interest rates annual percentage rates and other terms advertised here are estimates provided by those advertising partners based on the information you entered above and do not bind any lender Monthly payment amounts stated do not include amounts for taxes and insurance premiums The actual payment obligation will be greater if taxes and insurance are included Although our data partner RateUpdatecom collects the information from the financial institutions themselves the accuracy of the data cannot be guaranteed Rates may change without notice and can change intraday Some of the information contained in the rate tables including but not limited to special marketing notes is provided directly by the lenders Please verify the rates and offers before applying for a loan with the financial institution themselves No rate is binding until locked by a lender
Edited by Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
Updated November 7, 2020
Distressed Refinance and Loan Modification Programs
The federal government has implemented several programs designed to help borrowers who are struggling to pay their mortgages or who are dealing with a significant decline in the value of their home. The programs are intended to help borrowers refinance or modify the terms of their mortgage to reduce their principal loan balance or lower their monthly payments. The programs outlined below are targeted at the most distressed borrowers who are on the verge of foreclosure or losing their homes. Most of these programs are meant for borrowers who are both underwater on their mortgage and who are behind on their payments.
Programs such as the Enhanced Relief Refinance Program, the High LTV Refinance Option and the FHFA Principal Reduction Modification Program, the most popular refinance programs for underwater borrowers, are meant for borrowers who have the financial ability to continue to make a monthly mortgage payment, although potentially a reduced one. The list below shows distressed refinance and loan modification programs for specific loan programs and borrower situations.
For example, specialized programs are available for borrowers with FHA, VA and USDA loans in addition to conventional loans that are not backed by the government. There are also programs for borrowers who may not be able to afford the second mortgages they have. Additionally, unemployed borrowers struggling to make ends meet may be able to use the Home Affordable Unemployment Program (UP) to stay in their homes. Some of these programs are available through your current mortgage lender while others are provided by government agencies or state or local HUD-approved housing commissions or agencies.
This is point that we want to emphasize: many distressed homeowner programs, including foreclosure prevention programs, are offered through state or local housing commissions. These HUD-approved organizations may offer programs that can help you refinance your mortgage or keep your home. If you are having difficulty making your mortgage payment we recommend that you contact your state or local housing commission to review the programs in the table below and to learn about other programs that may be applicable to you.
Select your state to contact HUD-approved housing commissions about homeowner assistance programsHUD Resources
The list below summarizes many of the distressed refinance and loan modification programs programs available to borrowers and provides links to where you can find additional information. It is important to highlight that several but not all distressed refinance and loan modification programs are no longer available as the housing market and economy have rebounded and we note if a program has expired. Review the information below to find the distressed refinance or loan modification program that best meets your needs.
Program
Program Description
Find More Information
Flex Modification Program
The Flex Modification Program targets distressed borrowers who are more than 60 days delinquent on their mortgage or who are in imminent risk of default
The goal of the program is to help struggling borrowers modify their existing mortgages into more affordable and sustainable loans
The program is designed to reduce your monthly mortgage payment by at least 20% so that your total monthly housing expense (including property taxes and insurance) is no more than 40% of your monthly gross income
The program offers borrowers principal forbearance (reduction) of up to 30% of the unpaid loan balance with a target loan-to-value ratio of 80% -100% based on your current property value. For example, if your current loan balance is $100,000 you may be eligble to have your mortgage reduced by up to $30,000
Other potential Flex Modification Program benefits include a reduction in interest rate, the conversion of an adjustable rate mortgage into a fixed rate loan and an extension of your loan term to 480 months (40 years), all of which reduce your monthly payment
To be eligble for the Flexible Modification Program your mortgage must be owned by Fannie Mae or Freddie Mac
The Flex Modification Program is offered through participating lenders. You should contact your mortgage servicer (the company to which you make your mortgage payment) to determine if you are eligible for the program
The HAMP Program expired on December 31, 2016 and was replaced by the Flex Modification Program (see above)
If you are not unemployed, but you are still struggling to make your mortgage payments, you may be eligible for the Home Affordable Modification Program (HAMP)
The HAMP program provides lenders with financial incentives to help distressed borrowers modify their mortgages
By modifying your mortgage through the HAMP program you may be able to lower your monthly mortgage payments in order to make them more affordable and sustainable for the long-term
Because the HAMP program works through lenders, contact your mortgage servicer (the company to which you make your mortgage payments) to see if they participate in the program
To apply for HAMP you must submit an application to your mortgage servicer
There are over 100 participating HAMP mortgage servicers
FHA, VA and USDA Home Affordable Modification Programs (FHA-HAMP, VA-HAMP, USDA-HAMP)
The Federal Housing Administration (FHA), Department of Veterans Affairs (VA) and U.S. Department of Agriculture (USDA) all offer mortgage modification programs for struggling homeowners designed to lower monthly mortgage payments to no more than 31% of the homeowner's verified monthly gross income — making monthly mortgage payments much more affordable
If you have a loan that is insured or guaranteed by the FHA, VA or USDA you may be eligible for a HAMP program offered through that government agency
Part of the HAMP Program, the Principal Reduction Alternative (PRA) was designed to help you by encouraging mortgage servicers and investors to reduce the amount of your mortgage
THE PRA program is designed for borrowers who are significantly underwater on their homes (the amount of their mortgages is much greater than the value of their properties)
There are several eligibility requirements to qualify for the PRA program including that your mortgage payment is more than 31 percent of your gross monthly income, you have a financial hardship and are either delinquent or in danger of falling behind on your mortgage and you must have sufficient, documented income to support the modified payment
The PRA program works through lenders, so contact your mortgage servicer (the company to which you make your mortgage payments) to see if they participate in the program
Second Lien Modification Program (2MP)
The Second Lien Modification Program (2MP) is designed to help borrowers that have a home equity loan, HELOC, or some other second mortgage that is making it difficult for them to make their mortgage payments
To be eligible for the 2MP program a borrower's first mortgage had to have been permanently modified under the HAMP program
2MP works in tandem with HAMP to provide comprehensive solutions for homeowners with second mortgages to increase long-term affordability and sustainability
The 2MP program works through lenders, so contact your mortgage servicer (the company to which you make your mortgage payments) to see if they participate in the program and they can also evaluate you for a second lien modification
Home Affordable Foreclosure Alternatives (HAFA) Program
The Home Affordable Foreclosure Alternatives (HAFA) program is designed for borrowers that cannot afford their mortgage payments and recognize that it is time for them to transition to more affordable housing
The HAFA provides two options for transitioning out of a mortgage:
1) Short sale. In a short sale, the lender lets you sell your house for an amount that falls "short" of the amount of your mortgage
2) Deed-in-Lieu (DIL) of foreclosure. In the DIL, the lender lets you give the title back, transferring ownership of the property back to them
Unlike conventional short sales, a HAFA short sale completely releases you from your mortgage debt after selling the property. This means you will no longer be responsible for the amount that falls "short" of the amount you owe on the mortgage. The deficiency is guaranteed to be waived by the mortgage servicer
In a HAFA short sale, your mortgage company works with you to determine an acceptable sales price for the property
HAFA has a less negative effect on your credit score than foreclosure or conventional short sales
When you sell your house short or transfer the title back to the lender, HAFA provides $3,000 in relocation assistance
There are several eligibility requirements to qualify for the HAFA program including that you live in the property or have lived there within the last 12 months, you have a documented financial hardship and you have not purchased a new house within the last 12 months
HAFA is available for mortgages that are owned or guaranteed by Fannie Mae and Freddie Mac . See Fannie Mae and Freddie Mac's Loan Lookup Tools to determine if your property is owned or guaranteed by Fannie Mae or Freddie Mac or serviced by over 100 HAMP participating mortgage servicers
FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance)
The FHA Short Refinance program provides financial incentives for lenders to refinance and modify FHA-insured mortgages
The FHA Short Refinance program is designed for borrowers with FHA-insured mortgages who are not behind on their mortgage payments but whose mortgages are greater than the value of their properties
FHA Short Refinance is designed to help homeowners refinance into more affordable, more stable FHA-insured mortgage
The FHA Short Refinance program works through lenders so contact your mortgage servicer (the company to which you make your mortgage payments) to see if they participate in the program
If your current lender agrees to participate in an FHA short refinance, they will be required to reduce the amount you owe on your first mortgage to no more than 97.75% of your property's current value
Participation of mortgage servicers is voluntary
FHA Second Lien Program (FHA-2LP)
The FHA-2LP program expired on December 31, 2013 but we provide the following summary for informational purposes
If you have a second mortgage and your first mortgage servicer agrees to participate in an FHA Short Refinance, you may be eligible to have your second mortgage on the same property reduced or eliminated through the FHA Second Lien Program (FHA-2LP)
To be eligible for the FHA-2LP program you must first verify that you are eligible for an FHA Short Refinance and you must have obtained your mortgage on or before January 1, 2009
If the servicer of your first mortgage agrees to an FHA Short Refinance, the first mortgage servicer will work with the second mortgage servicer to reduce or eliminate the second mortgage
If your second mortgage servicer agrees to participate, the total amount of your total mortgage debt (including your first and second mortgages) after the refinance cannot exceed 115% of your home's current value
The FHA-2LP program works through lenders, so contact your mortgage servicer (the company to which you make your mortgage payments) to see if they participate in the program and they can also evaluate you for a second mortgage modification
Home Affordable Unemployment Program (UP)
If you are unemployed and struggling to pay your monthly mortgage payment, the Home Affordable Unemployment Program (UP) may reduce your mortgage payments to 31% of your monthly gross income or suspend them altogether for 12 months or more
To be eligible for the UP program you must be unemployed and eligible for unemployment benefits, occupy the house as your primary residence, have not previously received a HAMP modification and you must have obtained your mortgage on or before January 1, 2009
The UP program is not currently available for homeowners with mortgages held by Fannie Mae and Freddie Mac; however, both have their own programs for unemployed homeowners
Use Fannie Mae and Freddie Mac's Loan Lookup Tools to determine if your property is owned or guaranteed by Fannie Mae or Freddie Mac
The UP program works through lenders so contact your mortgage servicer (the company to which you make your mortgage payments) to see if they participate in the program
Use the FREEandCLEAR Lender Directory to search for twenty-five loan programs including multiple refinance assistance options.
Rate data provided by RateUpdate.com. Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes, insurance premiums or private mortgage insurance if applicable. Actual payments will be greater with taxes and insurance included. Read through our lender table disclaimer for more information on rates and product details.
"Making Home Affordable." U.S. Department of the Treasury & U.S. Department of Housing and Urban Development, 2019. Web.
"Loss Mitigation Services For FHA Homeowners." Federal Housing Administration. U.S. Department of Housing and Urban Development, 2020. Web.
"VA help to avoid foreclosure." VA. U.S. Department of Veterans Affairs, 2020. Web.
"Steps to Avoid Foreclosure." Rural Development Home Loans. U.S. Department of Agriculture, 2019. Web.
About the author
Michael Jensen, Mortgage and Finance Guru
Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael
