Principal Reduction Alternative (PRA)

The Principal Reduction Alternative (PRA) program ended on December 31, 2016. Learn what foreclosure avoidance options are still available.

In 2009, the federal government started the Making Home Affordable (MHA) initiative to help homeowners avoid foreclosure. One of the components of the MHA initiative was the Principal Reduction Alternative (PRA) program. Under the PRA program, some of the principal of a borrower’s loan was forgiven and didn't have to be repaid as long as the borrower remained in good standing—not more than 60 days delinquent—on a Home Affordable Modification Program (HAMP) modification.

Unfortunately, the MHA programs—including PRA—ended on December 31, 2016. Read on to learn what kinds of foreclosure avoidance options are still available and how you can get help if you’re facing a foreclosure.

Available Loss Mitigation Options

While the PRA program ended in 2016, other foreclosure avoidance programs—like the Fannie Mae and Freddie Mac Flex Modification Program, as well as proprietary (in-house) modifications and other loss mitigation options—now exist to help homeowners who’re having trouble making their mortgage payments. Also, your state might have a Hardest Hit Fund program that, for example, provides money to make your mortgage payments, reinstates a defaulted loan, or pays off or reduces the amount owed on a first or second mortgage.

One program under the Making Home Affordable initiative that's still available is the Home Affordable Refinance Program—or "HARP"—which remains in effect until December 31, 2018. HARP is the mortgage refinance option under the MHA initiative. With HARP, you might be able to:

  • get a lower interest rate on your mortgage loan
  • get a shorter loan term, and/or
  • change from an adjustable to fixed-rate mortgage.

(To learn more about that program, see The Home Affordable Refinance Program.)

Getting Help

If you’re struggling with your mortgage payments and facing a possible foreclosure, contact your loan servicer or a HUD-approved housing counselor as soon as possible. (Learn more about what HUD-approved housing counselors do.)

If you want to learn about how foreclosure works in your state and find out about possible foreclosure defenses in your case, consider talking to a foreclosure lawyer.

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