ALEXANDRIA, Va. (6/19/09)--Federal credit unions that take part in the U.S. Treasury’s home loan modification program will be allowed to modify second mortgage loans to match the terms of modified first mortgages after the National Credit Union Administration (NCUA) on Thursday voted unanimously to relax some existing lending rules. Although the Treasury recently added a second lien program to its Making Home Affordable (MHA) program, many credit unions could not participate in this program due to NCUA lending rules that “impose a 20-year maturity limit on second mortgage loans that are secured by the member-borrower’s primary residence,” according to a NCUA board action memorandum. As a reaction to this circumstance, the NCUA issued an interim final rule that is limited in scope and will allow credit unions to participate in the MHA's second lien program. Under the final rule, credit unions will be able to modify a second mortgage to match the term of a modified first mortgage--even if it is extended beyond 20 years. The NCUA currently allows credit unions to extend first mortgage loans to as long as 40 years. NCUA Vice Chairman Rodney Hood supported the measure, adding that he gives his full backing to “anything that keeps people in their homes.” The interim final rule will become effective immediately upon publication in the Federal Register. However, the NCUA will accept public comment on the rule and could revise the final rule, if necessary. The board also unanimously supported a recommendation to amend its rules to allow federal credit unions to exclude investments in the Credit Union System Investment Program (CU SIP) and Credit Union Homeowners Affordability Relief Program (CU HARP) from their total assets. Federal credit unions currently use their total assets to calculate their operating fees. This rule is final, and will be effective beginning on Jan. 10, 2010.