The Home Affordable Modification Program (HAMP) is part of the government’s Making Home Affordable initiative. HAMP modifies existing first-lien mortgages to lower the monthly mortgage payment. Previously, HAMP was only available for primary residences, but the rules changed on June 1, 2012, and now HAMP modifications are available for certain investment properties.
(To learn about other government programs available to help struggling homeowners, visit our Government Foreclosure Prevention Programs topic area.)
Investment Property Defined
An investment property is a property that is:
- not your primary residence, and
- is purchased in order to generate income, profit from appreciation, or to take advantage of certain tax benefits.
Rental property is a type of investment property.
HAMP Modifications Are Available for Rental Properties
HAMP assists borrowers by modifying their first-lien mortgages so that the monthly payments are lower and more affordable. As of June 1, 2012, HAMP is available to borrowers who are seeking a modification on property that is currently rented or that the homeowner intends to rent.
You may qualify for a HAMP modification if:
- the mortgage was taken out on or before January 1, 2009
- the mortgage debt does not exceed $729,750 on a primary residence or single unit rental property
- the mortgage debt does not exceed $934,200 on a 2-unit rental property; $1,129,250 on a 3-unit rental property; or $1,403,400 on a 4-unit rental property
- the property has not been condemned
- you have suffered a financial hardship and are either delinquent or in danger of becoming delinquent on your mortgage payments (non-owner occupants must be delinquent in order to qualify)
- your current income will support a modified payment (meaning, you must be employed), and
- you have not been convicted of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction within the last ten years.
To apply for HAMP, contact your mortgage servicer. Even if your mortgage servicer does not participate in the program (or if you have been denied HAMP), your loan servicer may offer its own alternative to foreclosure.
Second Lien Modification Program
If your first mortgage was permanently modified under HAMP and you also have a second mortgage, you may qualify for the Second Lien Modification Program (2MP) under the Making Home Affordable program. The 2MP program provides modifications or principal reductions on second mortgages.
If you meet all of the following criteria, you may be eligible for 2MP:
- the first mortgage was modified under HAMP
- you have not been convicted of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction within the last ten years, and
- you have not missed three consecutive monthly payments on your HAMP modification.
If you feel you may qualify for 2MP, contact the servicer of your second mortgage to discuss this option.
The government requires that servicers of loans owned or guaranteed by Fannie Mae or Freddie Mac participate in the Making Home Affordable program. Go to www.fanniemae.com/loanlookup and www.freddiemac.com/mymortgage to find out if Fannie Mae or Freddie Mac is the owner of your loan.
For servicers of non-Fannie Mae or Freddie Mac loans, participation is voluntary. A current list of participating servicers is available at www.makinghomeaffordable.gov/get-assistance/contact-mortgage/Pages/default.aspx or you can contact your mortgage servicer and askif it participates in the program.
For More Information
HAMP is scheduled to end on December 31, 2015. If you have additional questions about HAMP, or any other program under the Making Home Affordable initiative, you can call 1-888-995-HOPE (4673) or go to www.makinghomeaffordable.gov for more information.