Grants for Saving Homes From Foreclosure
The federal government does not provide direct grants to individuals for foreclosure relief, however, deferred loans, reimbursement programs and financial incentives are available to ease a distressed homeowner's financial obligations. The U.S. Department of Housing and Urban Development and other federal agencies are working together to provide homeowners with alternatives to foreclosure.
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Help for Unemployed
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Homeowners who have experienced a decrease in income can get help paying for their mortgage. The Hardest Hit fund has a mortgage payment assistance program for homeowners who have low or moderate income. The mortgage subsidy is provided to homeowners for up to six months. The financial aid is typically provided in the form of a zero-interest forgivable loan. The Emergency Homeowners Loan program, or EHLP, provides a declining balance loan for to up to $50,000 to homeowners who have experienced a 15 percent decrease in income. No payment is due during the first five years as along as the property is the homeowner's primary place of residence . After the initial five years, the balance of the loan will decrease 20 percent annually.
Homeowners' Assistance Program
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The military Homeowners' Assistance Program provides a reimbursement payment to service members and certain federal employees who are ordered to relocate and need to sell their home. To get the reimbursement, the home must be the owner's primary place of residence. The home must have suffered a 10 percent or more decrease in value. Surviving spouses may also qualify for an reimbursement. The home must have been purchased prior to July 1, 2006. The difference between the home's prior fair market value and the selling price is how HAP reimbursements are calculated.
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Short Sale
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The Home Affordable Foreclosure Alternatives program provides $1,500 for moving expenses to homeowners who short sell their property. The bank is taking a loss on the sale of the home since it has negative equity. The program provides incentives to the bank, to speed up the short sale process. The program is in effect until December 31, 2012. The Federal Housing Administration, or FHA, also provides incentives for homeowners to short sell their home. FHA gives $1,000 to homeowners who sell their home within three months of submitting an application for help.
Transition Assistance
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The Hardest Hit fund also provides transition assistance to homeowners who need to obtain new housing. The homeowner must be low or moderate income to get help. The money can be used toward rent, security deposits and other moving expenses. Transition assistance is not a loan program. Only certain states received funding to help homeowners with transition assistance. Homeowners must contact their local housing finance agency to determine if help is available in their state.
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References
- Photo Credit house image by Svetlana Kashkina from Fotolia.com
