Yes, it’s true. Due to the economy and the general decrease in income in the American household, the feds have a program that can cut your mortgage rate to 2% in order to make your payment 31% of your gross income. However, it seems that qualifying for this program will take some pretty fancy maneuvering. Here are some tips to give you a general idea if you can qualify, and what to do to get the loan to the closed and funded status.

The Making Home Affordable program is the newest of the loan modification programs. The mortgages have to belong to Freddie Mac or Fannie Mae. These are the two large mortgage loan holders the government took over about a year ago. They are cutting rates to as low as 2% in an attempt to reduce your payments to no more than 31% of the homeowners gross income.

The first thing you need to qualify if for one of these two companies to own your mortgage loan. Even if you received your home loan from a commercial bank, that does not mean that Freddie or Fannie does not hold the mortgage now. These two companies buy many loans from commercial banks.

Just go to the Freddie Mac and the Fannie Mae sites to find out if they own your mortgage. You will just fill in some information about your house and yourself. Even if you do not think your loan is owned by these companies, still check. The bank that you got the loan through may have sold your loan but is still servicing it, you would not know that it had been sold. If they do not own your mortgage, you do not qualify.

For a rough idea if your mortgage amount will qualify for the program, divide your mortgage payment by your gross income, this will give your the percent the payment is of your gross income. Do not forget to add interest, insurance, taxes, and principal together for the entire house payment.

Two other ways you will qualify are; If you have an adjustable rate mortgage that has almost doubled in payment and mortgage loan rates. The second is if you qualified for your loan with household income and one of you lost a job or had a cut in hours worked.

To qualify, you have to convince the lender that you are in a tough place now but with the new mortgage, you will be fine and keep up on all payments. You will not qualify if you have a lot of money in the bank, you will not qualify if you have just a little bit of money in the bank. You will not qualify if you have a large amount of credit card debt, or high payments on car loans.

If you are in an extremely bad place, you will not qualify either, you will not be able to qualify for this program with unemployment insurance as your income. One of the qualifiers is you must have a job with a good chance of still being employed in 9 months.

While I was researching this topic, I came across an article that had a lender quoted as telling homeowners “if you want to get the banks attention, go delinquent a month or two.”

There is help on the internet to see if your qualify, contact HUD, or another non-profit, Homeowner’s toolbox who claim they can estimate the probability of approval best mortgage loan rates for you.

It’s a great time to be shopping for a house with exceptional mortgage loan rates available from reputable credit unions. For extra financial security, have a look at fixed GIC rate products.