Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Dec 5, 2012

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Even though there has been a small amount of job recovery, people are still struggling to make payments on their homes. The days of massive foreclosures are behind us, but that doesn’t mean that everybody’s properties are safe and sound. Financial difficulties presently make the prospect of losing a home very real for many people.

Fortunately, there are a few government programs that can help borrowers in need of assistance.

The Home Affordable Modification Program (HAMP) and Home Affordable Refinance Program (HARP) are two such initiatives that can benefit struggling borrowers. The differences and characteristics of these two programs can help borrowers see which one they qualify for and should pursue.


The Home Affordable Modification Program (HAMP) is a government program that aims to help homeowners avoid foreclosure by subsiding mortgage lender modifications to borrowers’ home loans. While HAMP “modifies” home loan agreements, it does not “refinance” them.

There are several qualifications that applications must meet in order to obtain HAMP’s aid:

  • The property must be a primary residence or rented out to personal friends of the applicant.
  • On a primary residence or single-unit rental property, the mortgage loan amount must equal $729,750 or less.
  • On a 2-unit rental property, the home financing amount must be $934,200 or less.
  • On a 3-unit rental property, the amount owed must be $1,129,250 or less.
  • On a 4-unit rental property, outstanding balance must be $1,403,400 or less.
  • The property cannot be condemned.  
  • The securing home loan must have been borrowed before January 1, 2009.  
  • Applicants must be facing medical problems, the recent death of a spouse, or significant economic hardship, such as a job loss.
  • Applicants must have a stable source of income that is capable of making the new modified payment amounts.

Even if borrowers meet these requirements, they must still speak with their lender and document their income, debts, assets, and financial hardships. If approved, borrowers get a trial modification before they are ultimately granted a permanent modification. On average, HAMP saves borrowers $500 a month.

HAMP has successfully helped 2,054,979 applicants thus far.


The Home Affordable Refinance Program (HARP) is only for borrowers that are underwater on their mortgage loans and want to avoid foreclosure. This program allows homeowners to refinance their home loans to the lowest available interest rate level. Applicants do not have to be facing financial hardship or threat of foreclosure by their lender.

Aside from that, there are still other requirements that applicants must meet:

  • Their mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac.
  • If their mortgage was sold to Fannie or Freddie, the sale must have occurred on or before May 31, 2009.
  • Their mortgage must have a loan-to-value ratio of over 80 percent.
  • They must not have missed any payments in the last six months, and may have only missed a single payment in the last 12 months.
  • They cannot have participated in HARP in the past, unless that participation occurred between March and May of 2009.

If borrowers meet these criteria for HARP, they should contact their home loan servicer. Applicants can use a different lender than their current one, but they will be unable to obtain mortgage loan insurance coverage. Finally, those with a second mortgage can still refinance their first loan so long as the holder of the second mortgage agrees to subordinate it to the next first mortgage, which gets refinanced by HARP.

The assistance offered by HAMP and HARP can be an excellent path for borrowers to regain control of their financial life and budget in the wake of a job loss, medical problem, or the death of a spouse. Prospective applicants should apply for whichever program they qualify for. Being given approval for either one will grant individuals massive assistance on a monthly basis, saving them both money and stress. Borrowers have only an application fee to lose, but several hundred dollars a month in savings to gain.