According to the U.S. Department of Labor, the South Carolina unemployment rate for July was 10.8%. Dealt with this discouraging news and the sluggish real estate market, many homeowners are faced with a challenge each month in making their mortgage payments on time.

However, there is help available! Several programs exist just for this type of situation; one of them is the Making Home Affordable Program.

The Making Home Affordable Program is a federal program available to homeowners who are struggling to make their monthly house payments due to unemployment. If a homeowner meets the requirements, the monthly mortgage payment must be reduced to no more than 31% of their gross monthly income.

Requirements of this program:

  • Mortgage must be a first lien mortgage originated on or before January 1, 2009 and the unpaid principal balance must be equal to or less than $729,750 for a one-unit property.
  • Property must be the homeowner’s primary residence.
  • Mortgage has not been previously modified through a Home Affordable Modification.
  • Homeowner was ineligible for a Home Affordable Modification.
  • Homeowner is either behind on payments (but not by more than 3 consecutive months) or it is reasonably foreseeable that the homeowner will fall behind.
  • The total monthly mortgage payment is greater than 31% of the homeowner’s gross monthly income. If the payment is less, it is up to the servicer’s discretion if they will offer the program to the homeowner.
  • The homeowner will be unemployed at the start of the forbearance period, and is able to document this because they will be receiving unemployment benefits in the month the forbearance period begins (even if the benefits expire before the forbearance period ends).

For example: If you earn $50,000 a year, prior to taxes, and your monthly mortgage payment is $1,500 a month, your payment is 36% of your monthly income. This would be greater than the 31% eligibility requirement and you could potentially reduce your monthly mortgage payment by $208 if you meet the requirements of the program.

For more information, visit www.makinghomeaffordable.govor contact your mortgage servicer.