HUD Help for Homeowners

Homeowners can take advantage of the many programs HUD offers as alternatives to foreclosure.

President Obama has created many initiatives to assist distressed homeowners during the housing market crisis. The U.S. Department of Housing and Urban Development (HUD), along with the U.S. Department of Treasury, local governments and non-profit agencies have partnered up to administer these programs. Funding has been provided through federal and state levels. Some programs may not be available to everyone since not all states received the same funding.

Making Home Affordable Program

The Making Home Affordable Program offers homeowners several options to prevent the foreclosure of their homes. The Home Affordable Modification program (HAMP) assists homeowners in modifying their mortgages to make them more affordable. The Home Affordable Foreclosure Alternatives (HAFA) program provides incentives to banks that agree to the short sale of a property with negative equity. The bank must approve the short sale of a property in order for the homeowner to avoid foreclosure. The Home Affordable Unemployment Program (UP) allows homeowners who have experienced a decrease in income to apply for a forbearance on mortgage payments. The payments are suspended or reduced for up to 90 days.

Hardest Hit Fund

The Hardest Hit Fund was established to assist states that were hit the hardest with foreclosures during the housing market downturn. These programs are for low- to moderate-income households facing foreclosure. Homeowners who have experienced a decrease in income can receive a temporary mortgage subsidy. There is also financial assistance for homeowners who have fallen behind on mortgage payments and those who have homes with negative equity. Transition assistance is available to homeowners who need to secure new housing. These funds can be used toward moving expenses and a security deposit.

Emergency Homeowners Loan Program (EHLP)

EHLP is help for the unemployed. Deferred loans for up to $50,000 are provided to homeowners who have experienced a 15 percent decrease in income. To qualify for the program, the homeowner's income prior to the decrease could not have exceeded 120 percent of the area median income. Also, the homeowner must be at least three months delinquent on mortgage payments. Financial assistance can be received for up to 24 months.

Foreclosure Avoidance Counseling

HUD-approved housing counselors can help homeowners facing foreclosure make the best decisions for their financial situations. Housing counselors can assist homeowners through the loan modification process. The counselor can act on behalf of the homeowner and communicate the best plan of action to the bank. The counselor can also advocate for time extensions to hold off foreclosure actions and verify that issued legal documents are compliant with state laws.

References

• Making Home Affordable.gov: Borrower FAQ
• Making Home Affordable.gov: Local Solutions to Avoid Foreclosure
• HUD.gov: Foreclosure Avoidance Counseling