Archive for Friday, April 24, 2009

Plan for housing aid offers 2 options

April 24, 2009


Q:I have heard about the federal government’s plan to help homeowners who are struggling to meet their payments. What are the details? How can I find out if I qualify?

A:It boils down to two types of help: a special refinancing program and a more complete loan-modification plan.

The government estimates that up to 9 million homeowners qualify for one program or the other.

To be eligible for the special refinancing program, a homeowner must have at least a 20 percent equity stake in their property and have not missed a payment in the past 12 months. The government will back loans for banks to refinance the property at today’s lower rates. The catch is that the loan must be owned by the Federal National Mortgage Association (commonly called “Fannie Mae”) or the Federal Home Loan Mortgage Corp. (Freddie Mac).

Either agency might own your loan even if you write your monthly check to the bank that gave you the mortgage or a loan-service company that processes your payments. Call the bank’s customer-service department to find out if your loan is owned by Fannie or Freddie.

The new loan-modification program provides government incentives to banks to lower the interest rates they charge to as little as 2 percent and stretch their loan-repayment schedule to 40 years, either of which could save homeowners hundreds or even thousands of dollars each month. The program is not available to those who owe more than $729,750 to their bank, and most financially troubled borrowers qualify because they owe less.

Contact your lender’s customer-service department for details. Also go to the government’s Web site,, which includes a tool that can help you determine if you qualify for either program.

Q:What does the term “NNN” mean?

A:“NNN” is realty shorthand for a triple-net lease, usually involving a business property. The NNN stands for “net-net-net,” which means the tenant must not only pay the monthly rent but (unlike many other business leases) is also obligated to pay for all of the store or office’s share of most other expenses — from the project’s utilities and insurance to janitorial services and other costs. So nearly all of the money that the landlord collects is net profit that goes to the bottom line.


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