Making Home Affordable (MHA)

Written By
Paul Tracy
Updated July 27, 2021

What is Making Home Affordable (MHA)?

Making Home Affordable is a government program designed to help homeowners avoid foreclosure.

How Does Making Home Affordable (MHA) Work?

The Making Home Affordable program is actually a collection of several programs:

  • Home Affordable Modification Program (HAMP)
  • Principal Reduction Alternative SM (PRA)
  • Second Lien Modification Program (2MP)
  • FHA Home Affordable Modification Program (FHA-HAMP)
  • USDA’s Special Loan Servicing
  • Veterans Affairs Home Affordable Modification (VA-HAMP)
  • Home Affordable Foreclosure Alternatives Program (HAFA)
  • Second Lien Modification Program for Federal Housing Administration Loans (FHA-2LP)
  • Home Affordable Refinance Program (HARP)
  • FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance)
  • Home Affordable Unemployment Program (UP)
  • Hardest Hit Fund (HHF)

These programs have a variety of qualification guidelines and requirements, but in general they seek to lower homeowners' monthly loan payments, lower the interest rate on homeowners' mortgages, and help homeowners adjust the principal balances on their mortgages if necessary.

Why Does Making Home Affordable (MHA) Matter?

The idea behind Making Home Affordable is to stabilize the economy. A major contributor to the financial crisis of 2008 was a large number of defaults on home loans, which created cash crises for lenders and financial institutions that had created mortgage-backed securities based on expected timely loan payments. By helping homeowners avoid foreclosure, Making Home Affordable is intended to avoid a recurrence of a financial crisis.

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