The U.S. Treasury and a consortium of lenders and investors Thursday announced a plan to bail out some subprime borrowers. Who qualifies for the relief, and what type of help should they expect? Here are some answers.

Q: What happened?

In an effort to avoid a projected tidal wave of foreclosures as 1.8 million subprime mortgages reset to higher interest rates over the next two years, regulators and industry came together to work out an industrywide plan to temporarily freeze the interest rates on about one-third of these loans.

Why are only a third of the loans subject to a rate freeze?

The consortium that negotiated the deal believes that about 600,000 borrowers can refinance without trouble and another 600,000 can’t make their payments even at current rates, so they’re likely to need individual help if they’re going to avoid foreclosure. The remaining segment qualifies for the rate-freeze plan.

What does the plan do?

It freezes the borrower’s mortgage rate at its current level for five years. After that, the borrower would need to get a new loan or pay at the higher rate, as originally contracted.

Why five years?

Promoters of the plan believe that period will give borrowers time to build credit and equity, and thus be in a better position to refinance. It also gives the real estate market time to recover, so, presumably borrowers who want to refinance will not get rejected for having too little equity in their homes.

Who qualifies for the freeze?

To qualify, the residence must be owner-occupied. The borrowers must be no more than 30 days late on their mortgage payments and have a FICO credit score of 660 or less. The loan must have been originated between January 2005 and July 2007 and have an initial reset date between January 2008 and July 2010. The borrower must have less than 3 percent equity in the home.

What if I have a better credit score or more equity in my home?

You probably don’t qualify because lenders believe you can refinance. Those who can qualify for a new loan, either through a private lender or the Federal Housing Administration, are expected to do so.

If I meet all the criteria, what do I have to do to get the rate freeze?

Call your lender. Lenders are attempting to identify customers who qualify and proactively contact them. But, they urge borrowers to call because not all the necessary information is in their files.

Can my lender refuse to freeze my rate if I qualify under this plan?

Yes. This is an industry initiative, not a law. Participation is recommended but not mandatory. If your lender is not participating, your best option might be to try to refinance your loan.

I’ve been paying interest only during the teaser period. Does my payment freeze too, or do I have to start paying principal now?

The industrywide plan is silent on this issue, which means it’s likely to be decided on a case-by-case basis.

I have a prepayment penalty on my current loan, which is why I haven’t refinanced. Will lenders forgive those penalties under this plan?

Lenders are being encouraged to waive prepayment penalties, or stall refinances until they expire, but they are not compelled to. Lenders will decide on a case-by-case basis.