The Department of Veterans Affairs has outlined the terms of a new program to replace its VA Home Affordable Modification Program.
Previously, the department
VA introduced the VA HAMP-style modification in accordance with the Making Home Affordable program.
But on Friday, the VA unveiled the
VA Affordable Modification to replace HAMP on residential loans that are guaranteed by the agency.
The program was discussed in
Circular 26-17-10.
VA mortgages should be considered for the program when traditional home retention options are not feasible.
Modification offer a new monthly mortgage payment that doesn’t exceed 31 percent of the borrower’s gross income.
Rates on modified loans need to be fixed and no greater than the average reported in Freddie Mac’s Primary Mortgage Market Survey. The rate can’t exceed the loan’s current rate by more than 100 basis points.
The new modification option must be implemented by Oct. 1.
Friday’s circular is rescinded on April 1, 2019.
