In his most recent State of the Union address, President Obama talked about how the American dream -- owning and holding onto a home -- has dissipated for many due to lingering challenges in housing and mortgage lending.

The president offered hope to more homeowners by extending the Home Affordable Modification Program until Dec. 31, 2013 and widening the program's eligibility criteria.

HAMP allows qualifying homeowners with Fannie Mae or Freddie Mac mortgages made before June 1, 2009 to refinance to more favorable terms. It also provides incentives to participating mortgage lenders that reduce principle for qualifying borrowers.

According to the Making Homes Affordable, administered by Fannie Mae, (, "The Home Affordable Modification Program is designed to help financially struggling homeowners avoid foreclosure by modifying loans to a level that is affordable for borrowers now and sustainable over the long term. The program provides clear and consistent loan modification guidelines that the entire mortgage industry can use. The Home Affordable Modification Program includes incentives for borrowers, servicers and investors."

Millions of additional homeowners may be eligible for HAMP to reduce their home ownership costs and avoid foreclosure. Originally, the program was designed to reduce mortgage borrowers' debt ratio to 31 percent of their incomes, and those below that threshold were not eligible. These borrowers may now apply for HAMP consideration, as can borrowers struggling under the weight of other liabilities, such as medical bills.

Eligibility also has been extended to owners of rental properties -- as many as 700,000 landlords may qualify for loan modification under HAMP.

Moreover, borrowers who were approved for a HAMP trial period, but did not make the payments as scheduled, would now be eligible for consideration under new guidelines. Also, homeowners who missed payments under an approved HAMP modification would be eligible to reapply under the new rules.

The Obama administration announced it would triple balance-reduction incentives to lenders, paying up to 63 cents for every dollar lenders take off mortgage principal. The administration also said it would offer incentives to Fannie Mae and Freddie Mac to reduce principal on loans. Previously, the government had only offered incentives to private lenders and banks.

If your mortgage is owned, insured or guaranteed by Fannie Mae, Freddie Mac, FHA, VA or USDA you may be eligible for HAMP consideration. Contact your mortgage broker for more details and to see if you may qualify for this national program.

Linda Skolnick's "Skolnick's Scoop" appears every other Friday. She is a Realtor with Coldwell Banker Riverside in Westport and can be reached by calling 203-246-0088 or by through her website,