What Is the HAMP Program?

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Are you struggling to make your mortgage payments? If so, the Home Affordable Modification Program (HAMP) may be worth considering.

How HAMP Works

HAMP is a federal program that aims to make homeownership more affordable for existing homeowners. To accomplish this objective, participants receive one of the following:

  • A lower interest rate
  • An extended loan term
  • A reduction or forbearance of principal

According to Treasury.gov, many homeowners who use this program "are saving an average of over $500 per month."

HAMP Qualification Criteria

You must have a mortgage that was taken out January 1, 2009 or earlier with one of the following lenders to be considered:

  • Bank of America
  • Citi Mortgage
  • JP Morgan Chase
  • Wells Fargo

If your mortgage meets the above criteria, you will need to prove that you are having trouble keeping up with home loan payments because of financial difficulties. Furthermore, the property's outstanding mortgage balance must not exceed $729,750 or be condemned.

Assuming you qualify for the program, the lender that is handling your modification will place you on a three-month trial period. During this time frame, you will need to prove that you can make timely payments at the new amount. If you are successful, the lender will execute a formal modification agreement with you after the trial period.

Should You Apply for HAMP?

Before submitting an application, there are some pros and cons to consider.


When participating in HAMP, homeowners are afforded the opportunity to get back on track and stay in their home. Key benefits include:

  • Homeowners will have lower monthly payments resulting from a reduced principal balance, interest rate or extended loan term.
  • This type of loan modification does not require hefty fees. "One-time fees can range from $1,200 to $2,500 [while] Some modifications don't cost a thing," notes Realtor.com.


If you qualify for an extended loan term, this will result in more interest paid over the life of the loan. You should also be mindful that getting approved for HAMP is a process that can take several months, so you may still face foreclosure. In fact, ACGNow.com cites this as "one of the biggest problems faced by borrowers when it comes to the home loan modifications."

Even worse, some HAMP modifications result in exorbitant payments that must be remitted at the end of a specified loan term. "Often these agreements start with great terms, but then have a built-in balloon payment due for a huge amount - sometimes in just 6 or 12 months you'd have a payment of $10,000 to make," the Ark Law Group adds.

How to Apply for HAMP

You can apply for HAMP by submitting the requested income and mortgage documents from this comprehensive checklist. Required items include (but are not limited to):

  • Your mortgage statement or housing documentation
  • Income documentation, such as pay stubs for wage earners or a business profit and loss statement for the self-employed
  • Statements for other income received, such as social security, unemployment, disability, alimony, child support, pension, etc.
  • Copies of your two most recent tax returns
  • A copy of a utility bill that includes your name and address
  • A letter detailing your financial hardship

You'll also need to include the following forms:

  • Request for Mortgage Assistance Form: This form is used to provide information about your property and financial situation to your mortgage company.
  • Tax Form 506T-EZ: This document grants the mortgage company permission to request the most recent transcript of your tax return from the Internal Revenue Service. If you are exempt from filing federal taxes or your income is non-taxable, complete Tax Form 4506T instead.

If you are unsure of how to submit information to your lender, refer to MHA.gov for additional guidance.

Before You Apply

Be sure to call 888-995-HOPE to address any questions, concerns or determine if you qualify for other programs. You can also request to receive additional assistance from a HUD-approved housing counseling agency. Even if you don't qualify, the representative may be able to provide you with additional resources, such as refinancing options, that can help alleviate the financial burden caused by your mortgage payments.

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