The Principal Reduction Program (PRP) is one of CalHFA MAC’s federally-funded programs developed with a goal to provide capital to homeowners that have suffered a hardship to reduce the outstanding principal balances of qualifying properties with negative equity. PRP will provide monies to reduce the principal balance of the first mortgage through a loan recast or in conjunction with a loan modification that includes a rate reduction, each with the purpose of establishing an appropriate level of debt for eligible homeowners with qualifying properties.