The government developed the HAUP program to give servicers more flexibility under HAMP in order to help borrowers whose main difficulty in making payments is unemployment.

HAUP provides homeowners with what is called a “forbearance.” A forbearance is a time period (usually three months although this can be extended depending on investor and regulatory guidelines) during which a homeowner’s monthly mortgage payments are reduced or suspended.

Here are the full requirements to be eligible for HAUP:

• Mortgage loan is secured by a one- to four-unit property, one unit of which must be the borrower’s primary residence
• Mortgage loan is a first lien mortgage loan originated on or before January 1, 2009
• Current unpaid principal balance of the loan is equal to or less than $729,750.00 (single unit properties; 2-4 unit properties have a higher amount)
• The mortgage loan is delinquent or default is reasonably forseeable
• The mortgage loan has not been previously modified under HAMP and the borrower has not previously received an UP forbearance
• The request for an UP must be made before the loan is seriously delinquent (before three monthly payments are due and unpaid)
• The borrower is unemployed at the date of request and is able to document that he or she will receive unemployment benefits in the month of the Forbearance Period Effective Date. (This date is defined in the notice—see link at bottom of this post—but basically it is the month following the date that the forbearance is approved and the servicer gives or transmits the Forbearance Plan Notice to the borrower)
• Borrower’s total monthly mortgage payment (principal, interest, taxes, insurance and association fees, if any) prior to the modification must exceed 31% of the borrower’s gross income. This requirement can be waived by the servicer.

There are a couple of restrictions:

• A homeowner’s loan must not be owned or guaranteed by Fannie Mae or Freddie Mac or insured/guaranteed by a federal agency, such as the Federal Housing Administration (FHA).
• Anyone who already has a permanent HAMP modification and then become unemployed is not eligible for HAUP.

If you meet these requirements, contact your loan servicer to apply for an UP forbearance. Once your servicer has received documentation of your unemployment benefits, they must mail you an FPN or a Non-Approval Notice (approval or disapproval) within 10 days.

Download and read the full directive (PDF) here: https://www.hmpadmin.com/portal/programs/docs/hamp_servicer/sd1004.pdf