The federal government has expanded its Home Affordable Refinance program to include more Americans who originally were ineligible because they were too far upside down in their homes.

The first incarnation of the program only applied to those who were 105% upside down. But now that limit has been raised to 125% of a home's current value.

The government is doing this to give an incentive to hang in there to struggling homeowners. Mortgage rates have dropped recently to about 5.35% on 30-year loans and 4.85% on 15-year loans. (Editor's note: Rates accurate as of June 30, 2009.)

Speaking of 15-year loans, there's a special new incentive from the feds. Under the new rules, the government will cover much of your closing costs if you shorten the length of your loan and go for a 15-year note.

Clark says this is a real triple threat -- in the good sense. First, you have the expanded opportunity to refinance. Second, you have the incentive to go into a 15-year loan, which automatically has a lower rate. Third, you have the feds absorbing some of your closing costs on a 15-year refi.

It's win, win, win.

Why would the feds work extra hard to get you to shorten the length of your loan? You start hitting more of your principal from the start on a 15-year mortgage, which ultimately lowers the risk to taxpayers.

Yet there's a lot of resentment from people who have been able to pay their mortgages. They wonder why we are paying to subsidize those who are drowning.

Clark's response? You're missing the bigger picture. Stopping foreclosures helps preserve everyone's property values -- including yours.

One caveat: In order to take advantage of the new expanded mortgage bailout, your loan must be owned by either Fannie Mae or Freddie Mac. See instructions on how to determine if you qualify.

While much of the world has embraced alternative forms of energy, we're still playing catch-up in America.

The problem for homeowners has been figuring out how to implement technologies like solar, wind and geo-thermal. You can't exactly just call around for quotes.

That's where the power of the Internet comes in.

Sungevity.com allows you to enter your street address and get a guaranteed quote on installation of a home solar system. The assessment is done by satellite mapping, so no visit to your home is required. (Editor's note: This service may only be available in certain areas of the country.)

In addition, there's federal and state money available as part of the stimulus law to install alternative energy at your home or business. Clark predicts this will be a real growth area for entrepreneurs who can do energy-efficient retro-fitting on homes.

Mortgage lenders across the nation are seeing a trend of people opting for 15-year refinances instead of 30-year refinances.

This is a huge reversal back to the ways of an era when we didn't want to be in debt. For too long, Americans heard the hotel ballroom pitches about using "other people's money" (OPM) as a way to get rich through leverage by borrowing, borrowing, borrowing.

Now, the pendulum has swung the other way.

15-year refis don't have the same dramatic savings they once did vs. 30-year refis. In fact, the typical monthly payment on a 15-year refi is now 50% higher than on its 30-year counterpart.

So why the sudden appeal?

Homeowners know that the equity comes from paying down debt. Of course, have a narrow focus on wiping out your mortgage if you're not maxing out your retirement accounts is not advisable either. You've got to strike a healthy balance.

No matter how you slice it, people are getting more reflective about their finances. Christa and her husband like to have what they call "money movie night" each week where they put a film on for their children and pore over their finances.

Questions about refinancing a mortgage are among the hottest we're getting on the show right now. Today Clark spoke to one caller and shared a few tips to make the process as smooth as possible.

If you're in the market for a refi, begin by visiting myFICO.com and getting your true credit score. In the example of today's caller, she had a score of 703 and her husband's score was 824. Clark recommended they try to qualify for the refi on his income alone; most lenders will base your rate on the lower score if you're a couple.

Who can you go to for a refi? Clark recommended checking with a local bank or credit union. You'll want to get quotes from multiple lenders. And you may even want to get an online quote to use as leverage in negotiations. Whatever you do, be sure to get all quotes within a 14-day window to avoid damaging your credit.

Make sure you're prepared with all the paperwork that will be required of you…and it's going to be a lot. At the very least, you'll need to have your tax returns handy.

Finally, if you're waiting on the sidelines for rates to drop another quarter of a point, stop it! Even Clark's own predictions of months to come of ultra-low interest rates look like they're not going to pan out. Now is the time to strike.

Did you buy your house in 2000 or even more recently? The Washington Post now reports that you stand a chance of losing money if you were to sell today. In fact, more than 6 out of 10 people are selling for less than what they paid for their homes.

That means there's enormous opportunity for buyers.

Clark has been following our youngest producer Joel's quest to buy a home. In late winter, Joel put a bid on a short sale. He expected to get a response within a week; it took 3 months for the lender to even acknowledge his offer, and they countered with a price that was greater than the original listing price!

Meanwhile, those selling non-distress real estate are finding that it's hard to gain any traction in a market awash with foreclosures. And consider that the recent moratorium on foreclosures in the aftermath of the presidential election is set to run out soon. We'll soon be seeing a new wave of foreclosures as the ban lifts.

Joel is now looking to put a bid on a foreclosure. As a first-time homebuyer, he'll qualify for $8,000 in federal money, in addition to local money from his county. Even the Federal Home Loan banks have their own offers of "gimme" money. (Editor's note: You don't have to be a first-time homebuyer, actually. You only need to meet certain qualifications. Check with your lender for more details.)

And when will the housing market finally recover? Clark doesn't have a specific timeline to share, but he is noticing that the latest thinking suggests in-town and close-to-town markets will recover faster than suburban and exurban markets.

Residential housing starts have hit a 50-year low. That's actually very central to the housing market recovering. The pitiful pace of new construction means we're one step closer to supply and demand being back in sync in the housing market.

The average price of a home in the United States year over year is down by 13.8%. Now, you can look at those numbers and feel glum. Or you can realize the actual selling prices have been so heavily depressed by what's going on the bubble states and with all the foreclosures.

The truth is that the home market can not recover until supply and demand are in sync. The oversupply of houses means there's no market for houses that were bought at or near the peak. So they go into foreclosure and are snatched up by first-time homebuyers or investors. That creates a temporary floor to the market. Over time, month after month of depressed stats on home building means that household formation will soak up the inventory. The very act of the lack of building helps that happen. Clark predicts that the healing in the housing market will be anytime later this year to 2012 depending on your location in the country.

The one tough thing right now is if you have a house you want to sell or have to sell. We're not talking about the foreclosure crowd here. A new Home Gain survey of real estate agents finds that those on the market who are not in distress are overwhelmingly overpricing their homes. They're relying on old comps. Some 6 out of 10 are overpricing! Only 19% of people are pricing realistically.

The consequence is that you tend to get a lower final sale price if you overprice upfront.

Also, beware of the "hero" real estate agent. That's the person who comes in with the highest estimate of what they can sell your house for. Don't fall for it.

Be realistic about the price and you'll improve the odds of selling in an imperfect market. The best answer if you don't have to sell is to hang tight, though there's one exception. If you want to move up in house, now is the time to get a bigger foreclosed house. It will make be worth it to take hit on the sale of your house to move up in house.

CLARKONOMICS: There's much confusion over the federal bailout for homeowners and Clark wants to clear some of it up.

There are two scenarios under which the "Making Home Affordable" program could possibly work for you. The first is if you're behind on your mortgage, and the second is if you're current.

Let's examine the first scenario. If you can not afford payments and can not refinance for whatever reason, you will have the opportunity to have your loan temporarily reduced to 31% of your monthly income. This applies to homes valued at up to $759,750 in most areas of the country. Your interest rate may drop to as low as 2% for the next 5 years!

Under the second scenario, those who are current on a mortgage held by Fannie Mae or Freddie Mac will also be allowed to refinance -- as long as they're not more than 5% upside down in their home. (Note: This does not include a second mortgage). The new loan you'll get will likely be re-written to an interest rate of around 5.125%.

To determine if you're loan is held by Fannie Mae or Freddie Mac, simply follow our web links or call them directly. Contact Fannie at 1-800-7-FANNIE and Freddie at 1-800-FREDDIE from 8 a.m. to 8 p.m. ET. Start with Fannie Mae -- they're the larger of the two.

And you may also be eligible for assistance even if your loan is not with Fannie or Freddie. That's up to your individual lender, so get in touch with them to find out if you qualify.

For an additional resource that fleshes out more details, see The San Francisco Chronicle's Q & A and a link to the Treasury Department's official guidelines.

Meanwhile, it looks like the idea of empowering bankruptcy court judges to cram down mortgages is gaining momentum -- despite Clark's worries that this would undermine some of the basic tenets of capitalism. We'll keep you updated.

CLARKONOMICS: There's frightful news about housing everywhere you turn. Existing home sales have dropped to a 12-year low. Meanwhile, almost half of all homes sold across America in January were foreclosures. That's a startling statistic.

The home construction market is also in disarray. Housing starts are down 60% from just a year ago. Then there are the drops in the Case-Shiller home price index. Las Vegas is down 33%, Miami 29% and San Francisco 31%. The least-affected cities include Denver and Dallas, which are both only down 4% year over year.

Out of this ugly scenario comes the possibility of real opportunity. During the worst excesses of the housing bubble, the relative cost per month to rent was just a tiny fraction of what it cost on a monthly basis to buy. Yet now The Wall Street Journal reports the relative affordability of renting vs. the cost of buying is once again coming into synch.

That makes this a great time to buy a house, according to Clark.

Remember, the only important long haul factor for housing is supply and demand. Builders have stopped building, and that sets the stage for the excess in the market to be soaked up. Opportunists will be a necessary part of the correction. They start the healing by coming in and establishing a pricing floor that creates the stage for recovery.

Of course, "inertia bias" dictates that psychologically we feel home values will always be in decline -- because that's the way things are now. But that's not the case. Most of the bad news (and the decline) has already happened -- though it may not be over yet in every market.

CLARKONOMICS: The cold winter much of the nation is experiencing at the moment would traditionally mean high costs for heating your home. But right now, there is an oversupply of natural gas. In fact, the cost at wholesale is down around a third of what it was in the fall of 2005 leading into 2006. Clark even saw a recent trade at 48 cents per therm!

This means there is tremendous opportunity to save on your home heating costs -- especially if natural gas is a deregulated industry with multiple marketers competing in your state. The smartest move right now is to have a floating rate -- not a fixed rate -- so you can benefit from the current low prices.

On the gasoline front, there's currently a huge disconnect between the extremely low price of a barrel of oil at wholesale ($35) and the price of a gallon of gas at wholesale ($1.06). So there's definitely some wiggle room there for prices at the pump to drop again. In fact, Clark thinks we may routinely see a gallon selling for somewhere in the 90-cent range again.

But he wants to remind people this should not be a reason to get SUV crazy. In fact, OPEC and the Saudis are doing everything they can to reduce the supply coming out of the ground. Don't expect the new lower prices at the pump to stick around forever.

With the recent rise in crime, Clark wants to take a moment to revisit his advice about burglar alarms.

Nothing makes you feel more invaded than coming home to a break-in. Burglar alarm salespeople often read local police reports and may show up with an emotional sales pitch seeking to capitalize on your fear and anxiety.

Of course, it's better to search for an alarm-monitoring company before you need them. Clark recommends looking in the YellowPages and starting to call companies from the back of the listings -- not the ones at the front with the big ads.

First off, ask if they require a contract. You never want to sign a long-term contract. If you do, you open yourself to the danger of hidden rollover provisions.

Your second question should be about their monthly monitoring fees. You want something in the mid-to-high teens -- no more than $20/month.

Then you have equipment installation costs. You can usually get a preliminary quote over the phone by counting the number of doors and windows you have to protect. Consider adding an internal motion sensor as well. Initial equipment installation costs can be anywhere between $600 and $800 for a typical home.

Finally, make sure your monitoring station is UL approved.

We in America have historically enjoyed cheap energy prices. Of course that's all reversed now. There's a lot of evidence to suggest that energy could be costly in the future. While people are clamoring about finding more supply, what we really need to do is reduce our demand for energy.

One way to do that is build efficient structures. Architects who focus on "green" building can create savings of about 30% to 50% for the end user.

One American city that knows all about energy costs is Houston. In the heart of oil country, they're requiring commercial builders to construct energy-efficient properties. They're also trying to put those same standards on residential builders. The pushback from the residential sector has been intense so far. Montgomery County in Maryland is one place that has already successfully established mandatory green building standards.

Clark applauds Houston's efforts and hopes the city extends the standards to new residential homes. This can make a huge difference in energy costs. It's not about whether you buy into the idea of global warming or not; the reality is we're spending a fortune on energy. Green building is not about the environment, it's about your wallet.

Clark's been receiving a lot of calls from listeners who had HELOCs (home equity line of credit) shut off with no notice -- sometimes in the midst of a renovation!

Now it turns out this practice is illegal. New federal guidelines* have been issued that forbid banks from redlining via zip code, via state or any other blanket method. They are not allowed to arbitrarily shut down HELOCs in a neighborhood where home values are dropping.

If a bank wants to curtail your HELOC, they must look at your house and circumstances on an individual basis. So if you got the squeeze, go talk to your loan officer and get it rectified. They are required to restore your HELOC -- unless they have individual proof for your address or your situation that compelled them to cut it in the first place. Get in there and fight for your rights!

* Note that this is a pdf file.

Clark is excited by the idea of installing fake grass for the purpose of conserving water. Today's fake grass is a far cry from the AstroTurf of yesteryear. In fact, you can't tell today's fake grass isn't the real deal; manufacturers even weave in some decoy weeds!

In Las Vegas, homeowners are actually paid to dig up their yards and convert them to desertscape. The stunner is that the Las Vegas Strip only uses 3% of the city's water. That's because casino owners are good capitalists and have used every possible water-saving technique in their buildings.

The Los Angeles Times now reports that California is offering a similar deal. Golden State homeowners are being encouraged to convert to landscaping that requires less water. But some local municipalities are fining homeowners when they make the switch. Talk about state and local governments working at cross purposes!

Several states are doing some things that Clark sees as a sign of the times.

Hawaii is banning traditional water heaters in all new construction. The Aloha State is now requiring solar water heaters. While solar water heaters cost about 7 times what a traditional heater does, you can make your money back in a couple of years. This move should save homeowners $50/month on average.

But there's so much more we can do. Clark read a very disturbing story in Business Week that detailed how the coal industry is trying to use political influence to virtually outlaw windmills in the Great Plains states.

We as a nation should not allow dirty money to prevent us from having clean sources of energy.

The Business Week story focused on a Kansas rancher who overcame dirty money to get a windmill operation up and running. Clark salutes this determination to make a change.

Meanwhile, California is putting stickers on cars that provide a smog rating and a global warming rating. Whether you believe in global warming or not, no one can deny that smog exists.

Under the current system, a score of 10 represents the lowest levels of pollution and a score of 1 the highest.

Car manufacturers are obviously not happy about this -- unless they make what are called "super ultra low-emission vehicles." For example, the Honda Civic Hybrid has a smog rating of 9 and a global warming rating of 10.

These stickers are voluntary for now until next January when a law mandating them throughout the Golden State goes into effect.

CLARKONOMICS: Clark is not a man who's afraid of the condo market. He knows the value of a condo typically fluctuates like an EKG -- up and down in rapid cycles. Single-family homes, by contrast, tend to rise slowly but steadily over time, barring a bubble market. The problem is that people usually buy condos the wrong way. They own them for short periods of time and then can't get the value they paid when they resell.

Because of general market malaise, lenders are increasingly getting spooked about making loans for condos. New rules and requirements are being established that reflect the fear. It's getting tougher to refinance a condo loan or get one in the first place. Some lenders have even begun redlining -- that's where they take whole zip codes and refuse to make loans in them regardless of credit score.

Other lenders won't make loans in condo communities where there are more than 25% rentals. Some owners have become unwitting landlords so they can meet their monthly payments. Yet if a condo association allows a high percent of rentals, the condo community won't be exempt from future financing.

Compounding the problem are new Fannie Mae and Freddie Mac guidelines. Lenders are being required to make a decision about whether or not a condo association has solid books before making a loan. The practice hurts lenders who may want to sell out their loans out of portfolio, and Clark says it will have a further chilling effect on condo lending.

The pendulum swung too far with irresponsible lending; now it's swinging too far the other way. It all creates a hardship for those condo owners who want to sell. The good news is that there's great opportunity right now to buy a condo for cash or if you're able to get a loan. Condos go through phases of incredible pessimism followed by ill advised optimism. Right now we're in a pessimistic cycle, so look for the deals and pounce. Do you smell what Clark is cooking?