Part of $75 billion in total funding for the "Home Affordable Modification Program."  $50 billion of the funds come from the Treasury department, while $25 more come from various federal agencies.

The government will allow homeowners who are "underwater" on their home mortgage (current home value is less than the amount they owe on their mortgage) to modify their mortgage terms.

• Lenders must first agree to reduce mortgage payments to a manageable level no greater than 38% of a homeowners monthly income.  At this point, the Treasury will provide a "dollar-for-dollar" match of all reductions in payments down to 31% of the mortgage holder's monthly income. The government will use a combination of lowered interest rates, expanded mortgage payback periods, and reduced mortgage principal to reach the target 31% rate.  Mortgage payments would be held at the modified level for five years. After five years, interest rates on the loan can be increased by 1% per year until they reach the conforming loan survey rate at the time the mortgage modification was made.
• Homeowners who stay current on payments for their updated mortgages will receive up to $1,000 in incentive payments per year for five years.
• To discourage lenders from foreclosing on homes because they fear that home prices will fall further, the Treasury will pay lending companies for each home mortgage they choose to modify.  The total cost of these payments is capped at $10 billion.
• The program includes incentives to eliminate second liens on mortgages.
• The government will also create a standardized set of guidelines for mortgage modifications done by federal agencies and the private sector.  The government would use these guidelines in its own mortgage modifications.  All institutions that participate in the government's Financial Stability Plan (TARP) would be required to use these guidelines.
• Judges will be allowed to modify home mortgages to fair market value during bankruptcy proceedings.
• Make unspecified changes to the Hope for Homeowners program to increase its participation.
• Provide $2 billion in competitive grants for programs the reduce foreclosure.
• Provide $1.5 billion for renter assistance.