Are There Really Grants to Help People in Foreclosure?
Although most foreclosure-relief programs provide loan modifications and forbearance plans to help homeowners, some federal agencies provide reimbursements and financial incentives to help them avoid foreclosure. Qualified homeowners can contact a HUD-approved housing counselor to get help to determine if they are eligible for a reimbursement or incentive program. Homeowners can contact a housing counselor on the HOPE hotline 24 hours a day at 1-888-995-HOPE.
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Military Homeowners' Assistance Program
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The Military Homeowners' Assistance Program was signed into law in February 2009. Service members who have to sell a home because of relocation orders are able to receive a reimbursement for a portion of the losses on the sale. For the homeowner to qualify for help, the home must have been purchased before July 1, 2006, and sold by Sept. 30, 2012. The home must be the service member's primary place of residence. Service members can obtain an application for help on the U.S. Army Corps of Engineers website.
The Emergency Homeowners' Loan Program
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As of August 2010, Pres. Barack Obama provided $1 billion to 17 states to help homeowners stay in their homes. The Emergency Homeowners' Loan Program, or EHLP, provides a declining balance loan of up to $50,000 for homeowners who have experienced a decrease in income. No payment is required on the loan payment for the first five years as long as the homeowner maintains the home as his primary place of residence and stays current on mortgage payments. The $50,000 loan balance will decline 20 percent annually until it no longer exists.
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Hardest Hit Fund
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In February 2010, funding was provided to states with high unemployment rates and 20 percent decreases in property values. Homeowners in these states can get help with making mortgage payments and transition assistance to obtain new housing. To qualify for help, the homeowner must be low to moderate income. She also must be able to demonstrate she has suffered a financial hardship. The property facing foreclosure must be the homeowner's primary place of residence.
Short-sale Incentives
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The Home Affordable Foreclosure Alternatives, HAFA helps homeowners sell their homes with negative equity to avoid foreclosure. They must obtain approval from the bank to sell the home, since the balance owed on the mortgage is higher than the home's sales price. HAFA provides $1,500 for relocation expenses to the homeowner. The Federal Housing Administration (FHA) Preforeclosure Sales Program also helps homeowners sell their homes with negative equity. Homeowners are given $1,000 to sell their homes within three months of applying for help.
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References
- Photo Credit house image by Byron Moore from Fotolia.com
