For San Diego, one of the big sticking points on the federal homeowner-help refinancing program has been a restriction on how far underwater borrowers can be.

The plan announced in February was initially offered to homeowners whose mortgages were worth 105 percent of their homes' current value.

Now the option to refinance will be extended to homeowners who are even further underwater.

Today, HUD Secretary Shaun Donovan announced in Las Vegas that the plan will expand to include those 125 percent underwater on their mortgage but still current on their payments.

(More than 30 percent of all homeowners in San Diego County who have mortgages are underwater. Note: We're not talking about the loan modification, payment-reducing part of the federal Making Home Affordable program here, but the option to refinance the loans if you're underwater.)

There is a catch: The borrowers' loans must be owned or guaranteed by Fannie Mae and Freddie Mac. Both agencies have loan lookup programs (Fannie Mae and Freddie Mac) to determine whether you qualify. I'm checking to find out what other restrictions might apply to the refinancing program and I'll let you know what I hear.

I called a couple of people for their takes on the new restrictions.

"That's good, that'll help a lot of people in San Diego — that makes a lot of sense," said Mark Goldman, a local mortgage broker and SDSU real estate professor. "If somebody is upside-down, and can't refinance, they're more likely to walk away from their house."

Gary Laturno, a local real estate attorney and recent host of our Savvy & Sage series, said he'd heard many criticisms that the 105 percent guideline didn't do enough. "This will certainly make a lot more refis possible," Laturno said.

Here's more on the plan, from the HUD press release:

Making Home Affordable, a comprehensive plan to stabilize the U.S. housing market, was first announced by the Administration on February 18. In just a few months, more than 200,000 borrowers have received offers for trial loan modifications, tens of thousands of refinances and trial modifications are under way, and informational mailings about the program have been sent to more than one million borrowers who may be eligible.

What do you think of the expanded program? Leave a comment below (if you're not in Survival, head over there to share your thoughts).

— KELLY BENNETT