The current economic state and the inflation has lead to a substantial rise in the cost of living. The increased cost makes a government mortgage help plan absolutely vital, as monthly mortgage costs are the biggest cost that families have to bear. With rising household costs and mortgage payments, families can fall into a financial crunch if not crisis. But there is relief. This new plan from President Obama aims to help certain homeowners to restructure their mortgage plan so as to make it more affordable. This government mortgage help plan has two main components that the people can make use of - Home Affordable Refinance and Home Affordable Modification. To make use of these plans, you have to meet certain eligibility criterion. Each of the two plans has a separate set of eligibility criterion that you are required to have before you can use these plans to your benefit.

Home Affordable Refinance

This government mortgage help plan allows the borrower to refinance his mortgage or home loan into a fixed rate loan for a time period of 15 or 30 years. Even in the case where the home is worth less than what is still owed on the mortgage, you can apply for this plan. The new rate is dependent on the points and fees associated with the lender and the mortgage rate as it is at the time of refinancing.

To qualify for this program, the house in question should be the primary address and residence. Fanny Mae or Freddy Mac securitized or owned loans are the only applicable loans. The first mortgage should not exceed 105% of the house's value in the market at the time. The mortgage's date should be before 1st January, 2009 and you have to be current on the payment. The property in question should be a one to four unit property and the conforming loan limits are as follows:

• Single-family homes: $417,000

• Two-unit properties: $533,850

• Three-unit properties: $645,300

• Four-unit properties: $801,950

Home Affordable Modification

This government mortgage help plan is for the people who are unable to pay their monthly mortgage payments. Along with assistance from the mortgage lender, this plan can effectively bring down the costs of the monthly mortgage payment to an amount as low as 31% of your gross monthly income.

To qualify for this mortgage help, you will have to effectively prove that you cannot pay your monthly mortgage payment. Constant delays in the payments or risk of a default on a payment could be the proof. The house or property in question should be the primary address as well as the permanent residence and its mortgage's date should be before 1st January, 2009. The maximum loan amount to be applicable for this program should be up to $1.403 million for a four-unit home, $1.129 million for a three-unit home, $934,200 for a two-unit home and $729,750 for a single-family home. The mortgage payment should be more than 31% of the net, gross monthly income.

In both these plans vacant or abandoned property is not applicable. Many other clauses also exist about the non qualification for these government mortgage help plans.