Who qualifies for Obama's refi plan?

Written by Preston Rudie.

Tampa, Fla. -- Nearly half of all Bay area homeowners are underwater. In other words, they owe more than what their home is worth.

In an effort to provide some relief, President Obama announced on Monday that he wants to revamp the Home Affordable Refinance Program, or HARP, a program adopted two years ago that's already helped about 900,000 Americans.

So, who is eligible under the new plan?

First, your mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac and it must have been sold before May 31, 2009.

Next, you cannot be behind on your payments.

"In fact, you had to have made your last six mortgage payments and you can't have missed more than one payment over the last 12 months. You also have to have a job in order to apply for this loan program," said Home Encounters CEO Peter Murphy.

Finally, if you have already refinanced under HARP, you will not be able to do it again.

But under the new plan, officials say more homeowners will now be eligible. That's because before only those who owed up to 125% of the value of their home qualified. Now, borrowers will be able to refinance no matter how far underwater they are.

In some cases, those with a second mortgage will also be able to refinance.

However, Murphy cautions homeowners who are eligible to ask some important questions before moving forward.

"It's a big one: what will it really cost you to go in and get your home refinanced, question number one. Question number two - what real benefit will it be to you? You need to evaluate that with your financial planner. What's your mortgage right now and what will it be when you refi under HARP?"

The plan, which does not need Congressional approval, could take effect by December 1st.