The Obama administration kicked off a new program Wednesday that's designed to help up to 9 million borrowers stay in their homes through refinanced mortgages or loans that are modified to lower monthly payments. But tens of thousands of homeowners in some of the most battered real estate markets won't be eligible for the two programs.

It's not intended to prevent every foreclosure or to help every homeowner, a senior Treasury Department official told reporters. It's really targeted at responsible homeowners.

The program has two parts: one to work with lenders to modify the loan terms for up to 4 million homeowner, the second to refinance up to 5 million homeowners into more affordable fixed-rate loans.

For the modification program, borrowers who are eligible will have to provide their most recent tax return and two pay stubs, as well as an affidavit of financial hardship to qualify for the loan modification program, which runs through 2012.

Borrowers are only allowed to have their loans modified once, and the program only applies for loans made on Jan. 1 2009, or earlier. Mortgages for single-family properties that are worth more than $729,750 are excluded.

Lenders could reduce a borrower's interest rate to as low as 2% for five years. Rates would then rise to about 5% until the mortgage is repaid.

For the refinance program, only homeowners whose loans are held by Fannie Mae or Freddie Mac are eligible and have until June 2010 to apply. The problem there is that the fees imposed by Fannie and Freddie over the past year make it difficult for borrowers to afford to refinance. The two companies, which are now government controlled, have yet to detail how they will implement the plan, or whether any fees will be rolled back.

Lawmakers also continued to discuss whether to change bankruptcy laws to allow judges to write down the value of first mortgages on prime residences.

House Democrats agreed Tuesday to narrow proposed legislation that gives bankruptcy judges the power to change the terms of mortgage loans for debt-strapped borrowers.

In the latest version of the bill, judges would have to consider whether a homeowner had been offered a reasonable deal by the bank to rework his or her home loan before seeking help in bankruptcy court. Borrowers also would have a responsibility to prove that they tried to modify their mortgages.