The Obama Housing Stimulus Plan is surrounded by a lot of misinformation and misunderstanding. Do you know what it takes to qualify for the first time home buyer’s credit? What about loan modifications? This article will give you a great basic understanding of the new Housing Stimulus Plan and how it can help you –and thousands of other Americans– save their home from foreclosure.

One of the first things the new stimulus plan does is give first time home buyers a new tax credit of $8,000. This money is only available to individuals that have not owned a home for the last three years and only applies to homes purchased this year, in 2009. Homes purchased last year qualify for a different stimulus plan tax credit of $7,500 that must be repaid. This new tax credit is reduced is the buyer’s income is over $75,000 (if single) and $150,000 (if married). You can choose to have the tax credit paid to you through your 2009 taxes or an amendment to your 2008 tax return.

The plan also gives people with problem mortgages the chance to refinance for a new low, fixed rate. If your home mortgage is above 31% of your income, you have a loan through a government-approved lender and can prove that you can financially handle your new, lower payments, you may qualify for a refinancing. This can can help you in a number of areas, including giving you a lower monthly payment, converting an adjustable rate to a fixed rate, possible forgiveness of some principle, waived late fees and forgiven missed payments.

This new housing stimulus plan has the potential to help millions of Americans that are struggling to afford a new home, or keep the one they already have. If you’re preparing to buy a new home or are in desperate need of a refinancing on your existing home loan, consult with someone that specializes in home loans and the new stimulus plan to find out if you qualify for this government financing.

Final Tip: By researching and comparing the best loan modification companies in the market, you will be able to determine the one that meets your specific financial situation, plus the cheaper and quicker options available. However, it is advisable going with a trusted and reputable stop foreclosure specialist before making any decision, this way you will save time through specialized advise coming from a seasoned loan mods advisor and money by getting better results in a shorter span of time. Meaning getting your house out of risk as soon as possible.