VIDEO: Obama Housing Plan To Have Impact In March

Bair said applicants would need to show that it makes financial sense for them to stay in their homes if payments are reduced.

The Obama administration's $275 billion program to stem a wave of U.S. home foreclosures will start having an impact as soon as March, Federal Deposit Insurance Corporation chairman Sheila Bair said on Thursday.

"I think you'll start seeing an immediate impact in the increase of meaningful loan modifications in March, when the program becomes effective," Bair said on ABC's "Good Morning America."

The plan, unveiled on Wednesday, would allow up to 4 million borrowers facing foreclosure to get their payments reduced through modifications jointly paid for by lenders and the U.S. Treasury.

An additional 5 million who cannot qualify for conventional refinancing because their home values have dropped could refinance through housing finance companies Fannie Mae and Freddie Mac.

Bair said applicants would need to show that it makes financial sense for them to stay in their homes if payments are reduced.

"We'll take time to work through these incomes, verify the incomes, and get the payments to an affordable level, but I believe you'll start seeing a real impact in March, with meaningful long-term, sustainable modifications," she said.

Take a look at the VIDEO: Obama mortgage relief plan