The Federal Housing Finance Agency (FHFA) undertook an extensive evaluation to determine whether to implement a Principal Reduction Modification program for seriously delinquent, underwater borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac (the Enterprises). FHFA’s objective was to develop a program that helped targeted borrowers avoid foreclosure while also adhering to FHFA’s mandate to preserve and conserve the assets of the Enterprises.
Am I Eligible?
Your loan must be owned or guaranteed by Fannie Mae or Freddie Mac and meet basic criteria.
- At least 90 days delinquent as of March 1, 2016
- Unpaid principal balance of $250,000 or less as of March 1, 2016
- Owner-occupied
- Loan-to-value ratio exceeds 115%
- Generally meet other Streamlined Modification eligibility criteria
Resources
Internal Revenue Service Guidance on Tax Treatment of Principal Reduction Modifications (Notice 2016-72) (12/5/2016)
Principal Reduction Modification Borrower Event Handout (8/2/2016)
Principal Reduction Modification FAQs for Congressional Staff (7/11/2016)
Principal Reduction Modification FAQs for Housing Counselors (7/11/2016)
Principal Reduction Modification General FAQs (4/14/2016 revised 12/5/2016)
Background
News Release: FHFA Announces Principal Reduction Modification Program and Further Enhancements to Non-Performing Loan Sales Requirements (4/14/2016)
Fact Sheet: Principal Reduction Modification (4/14/2016)
FHFA Blog: FHFA Launches Map of Potentially Eligible Borrowers for Principal Reduction Modification (7/11/2016)
FHFA Blog: A Message to Borrowers Struggling With Mortgage Debt: Check Your Mail! (10/4/2016)
Letters & FAQs
Did you receive a Solicitation Letter in the mail from Fannie Mae or Freddie Mac? If so, you may be eligible for Principle Reduction Modification.
Protect Yourself From Scams
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