Here is the deal according to the article: Primary residence with loan greater than 90% of house “value” and backed by Fannie/Freddie or participating bank. The bank may reduce interest rates to 3% (or higher), extend loan  term to 40 years, and reduce principle in an effort to reduce your “payment” to 38% of your income.

The article talks about all of this in more detail and outlines some potentially controversial strategies to best take advantage of this program. I would bet that most in the bay area wouldn’t need to manipulate the system in order to qualify and benefit from this program.  Most people I know that purchased real estate in the past few years are closer to 60% of gross income funneled into housing and these are all folks right here in Prime San Francisco. And I’m talking about $1M+ homes / condos. I’m not sure how I feel about the program, but I know what I’d be doing if I were a home owner. What about you?