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announcement on April 14, 2016 that Fannie Mae and Freddie Mac will be offering a one-time Principal Reduction Modification program, one of the main questions we received was "where are eligible borrowers located?" Today, we are launching an
interactive online map on FHFA.gov that highlights the top 10 states where these
potentially eligible borrowers live. The program, however, is open to eligible borrowers nationwide.
The largest number of potentially eligible borrowers can be found in:
As you can see from the above map, eligible borrowers tend to be concentrated in communities across the country that have not yet fully recovered from the foreclosure crisis, especially in states with long foreclosure timelines. In each of the top 10 states, the interactive map provides a breakdown by zip code or MSA of potentially eligible borrowers. You can view the zip code and MSA breakdowns by switching between the two tabs at the top left of the map. You can also hover over each of the highlighted states for state-specific data, including the number of potentially eligible borrowers in each state, the average unpaid principal balance (UPB) of each loan, the average length of delinquency, and the average loan-to-value (LTV) ratio. For example, for the 6,260 potentially eligible borrowers in Florida, the average UPB is $156,719, the average days delinquent is 1,590, and the average LTV ratio is 158%.
The borrowers shown on the map are those who Fannie Mae and Freddie Mac
estimate will be eligible for the Principal Reduction Modification program. A borrower's
actual eligibility will be determined by their servicer once the servicer has implemented the program. Overall, FHFA estimates that more than 30,000 borrowers will be eligible nationwide. This is a slightly smaller number than was estimated when FHFA announced the program in April. This reduction can be attributed to the fact that the housing market is continuously evolving and may have improved in some areas.
While the total number of potentially eligible borrowers may seem small, it is important to give some context. The total number of underwater borrowers with a Fannie Mae or Freddie Mac loan has dropped by over 80 percent in the last four years. Of all underwater loans nationally, only about 2 percent are both severely delinquent and owned or guaranteed by Fannie Mae or Freddie Mac. The Principal Reduction Modification program is the final crisis-era modification program designed to give these borrowers a last opportunity to avoid foreclosure and stay in their homes.
As part of the strategy to reach as many potentially eligible borrowers as possible, FHFA, Fannie Mae, and Freddie Mac will leverage existing relationships between servicers and local housing partners in the top MSAs, as well as each of the Housing Finance Agencies in the top 10 states. Look for updates from FHFA on additional efforts to engage the eligible population throughout the summer and fall.
Servicers will begin soliciting potentially eligible borrowers for a Streamlined Modification no later than July 15, which will enable borrowers who believe they may be eligible for a Principal Reduction Modification to start a modification that may include a reduced monthly payment, an interest rate reduction and forbearance of principal and/or amounts in arrearage. Accepting a Streamlined Modification offer will not guarantee eligibility for a Principal Reduction Modification, but borrowers later determined to be eligible will see their forbearance amount converted to forgiveness. Servicers must solicit all borrowers eligible for the Principal Reduction Modification starting no later than October 15. All Principal Reduction Modification solicitation offers must be sent by December 31.
Borrowers must act quickly to save their homes: homeowners who are struggling to pay their mortgage and feel they meet the basic eligibility criteria outlined in the program announcement should contact their servicer directly.
For additional information on the Principal Reduction Modification program, visit
FHFA.gov or contact us at
Stakeholder Relations Officer
© 2020 Federal Housing Finance Agency