The $75 billion program offered by the federal government to help struggling homeowners has lifted the spirits of many beleaguered mortgage holders. Thousands of people will enjoy lower house payments which will help them stay afloat instead of going through foreclosure. Though many will be helped through this program, there are some clear-cut qualifications which must be met.

Below are the essentials for obtaining this relief: -- the property must be the homeowner's personal residence; -- first mortgages qualify but second mortgages do not; -- financial difficulty must be looming or presently occurring; -- payments may or may not be late but do not have to be late to qualify; -- proof of a stable income and other specifications must be met; -- a formal loan modification agreement, as well as all required paperwork, must be submitted to the lender.

Benefits to the homeowners, if they are qualified, is that house payments will be more reasonable at approximately 31 per cent of monthly income before taxes.

Other benefits include:

-- a much lower interest rate, some as low as 2%; -- the term of the loan may be amortized over 40 years; -- a reduced principal may be granted with both the government and the lending institution sharing the loss.

Though most lenders and servicing agencies are expected to comply with these new loan programs, the modifications are strictly voluntary. Certain monetary inducements with as much as $1,500 per loan to each lender and $500 to the servicing agencies, may help to ensure their cooperation in this effort to help homeowners who might otherwise default on their loans.

Additionally, homeowners who subsequently remain current in their new payment arrangement will also receive financial incentives for each year that they remain financially responsible. This could amount to approximately $1,000 a year for each year that they successfully pay their mortgage payment on time and in full.

Banks and other lending institutions are anticipating a huge response to the loan modification program and anyone interested in securing a loan should start organizing their paperwork for the task ahead. Obtaining application forms is one of the first necessary steps to begin the loan modification process. Examine them carefully and write down questions you have before you proceed. It is important that you fully understand the process so you can fill out the paperwork correctly. Having your paperwork in order will enable your lender to process your loan in a timely manner.