President Obama's Home Stimulus Package is providing help to homeowners hit hard by the dismal economy. People who are shouldering monthly mortgage payments they can no longer afford due to job losses or other financial hardship may qualify for assistance in the form of a lower monthly payment!

This lower payment is achieved through a modified mortgage, an existing loan that is rewritten, with different terms. This new loan can be written utilizing several tools included in this program that will help reduce the monthly payment for millions of homeowners. Interest rates may be reduced to as low as 2%, and loan terms may be lengthened to as long as 40 years. If necessary to arrive at the desired payment level, late fees can be waived and even the actual principal reduced!

If you have experienced financial hardship that has lowered your income or increased your expenses, you may qualify. Some other application guidelines are:

· Your loan must have been written on or before January 1, 2009.

· The loan amount cannot exceed $729,750.

· The home must be a primary dwelling.

· Your lender must be on the approved lender list, and the loan must be serviced by Fannie Mae or Freddie Mac.

· Your house payment must currently be at a figure which is more than 31% of your gross monthly income. This figure also includes insurance, taxes and association dues.

President Obama's Home Stimulus Package provides incentives to lenders to write these loan modifications, so they are motivated. But, you can only apply one time, so you need to get it right the first time. Familiarize yourself with the requirements and guidelines, gather your documents, and prepare your paperwork. You will need to write a hardship letter, preferably no more than 1 ½ pages, detailing the financial situation you have found yourself in. You also must provide a budget that shows how you will manage the new payment.