The HOPE for Homeowners Act is now in effect. Signed by President George W. Bush in July as part of the Housing and Economic Recovery Act of 2008, the HOPE program is designed to give relief to millions of struggling homeowners by restructuring their home mortgages.

To be eligible, the homeowner must use the home as his main residence, certify he hasn’t defaulted on the loan just to take advantage of the HOPE program and have a debt-to-income ratio greater than 31 percent as of March 1, 2008.

If the borrower qualifies, the lender will rewrite the loan down to an amount the borrower can pay, up to a cap of 90 percent of the current market value of the home.

The new loans must have a fixed rate for 30 years, with the borrower annually paying an extra 1.5 percent of the loan principal for Federal Housing Administration (FHA) insurance.

The downside to the borrower is that he must split any equity with the FHA down the road. That amount will be determined by a phased-in sliding scale, but can be as much as 100 percent of the equity if the borrower pays off the loan (by selling or refinancing) in the first year, or down to 50 percent at five years.

Not all lenders are eager to participate in the program, however. In theory, they’ll lose a bit now to keep from possibly losing a lot later if they don’t help homeowners get mortgages under control. Under the program, lenders would have to reduce the amount of the mortgage to 90 percent of the home’s present market value, which can be a considerable loss if home values in their area have already plunged. And the lenders will have to pay FHA, the backer of the loans, 3 percent of the amount.

Additional provisions of the act include a federal tax credit up to $7,500 (10 percent of the purchase price) to buy a new home, new regulations on reverse mortgages for the elderly and more protections for veterans facing foreclosure.

To read details of the act, go to www.govtrack.us, click “Bills and Resolutions,” and put “H.R. 3221” in the search box.

David Uffington is affiliated with King Features Syndicate Inc. He cannot personally answer reader questions, but he will incorporate them into his column whenever possible. Write to him in care of King Features Weekly Service, P.O. Box 536475, Orlando, FL 32853-6475, or send e-mail to columnreply@gmail.com.