Hardest Hit Fund Program
Housing Finance Agency Innovation Fund: Hardest Hit Housing Markets (HHF)
The total amount of funding available is $7.6 billion and used to provide assistance to remove uncertainty and help offset defaults and foreclosures, ensuring that the homeowners retain their homes and the lenders don’t take massive losses on home loans.
The Obama Administration has introduced this plan to help those living in the States that have been hardest hit by the current economic climate. Those States are Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee and Washington D.C.
If you live in one of these States, then you may qualify for additional funding to help offset financial hardships that can lead to making it difficult to continue your mortgage payments or a very real threat of losing the residence altogether.
Contact a home loan modification lawyer to get more information on how a resident of one of these States might benefit from this fund. Each State has a number of unique issues that apply to their individual economic situations.
Hardest Hit Program Details
Basic requirements of the home owner for the Hardest Hit Program;
- The home owner must be a resident of your state, and a legal US resident
- The home owner must be unemployed OR underemployed
- Total household debt must exceed 31% of the home owner’s total gross income
- Unencumbered Assets: Any home owner that has assets (including cash) greater than 3x the monthly home loan payment (does not include retirement plans, goods or required automobiles) must first use those assets to make or reduce the payments owed
- No standing bankruptcies or housing fraud based criminal convictions
Basic requirements of the property for the Hardest Hit Program;
- The property must be the primary and only occupied residence owned by the home owner
- Can be a single family dwelling, condominium (only if on the current FHA, Fannie Mae or Freddie Mac approved list), town home or mobile home (when used as a fixed residence, and not mobile)
Basic requirements of the property’s first mortgage for the Hardest Hit Program;
- Must be with a regulated financial institution, not seller financed, and participating in your state’s program
- Must not be more than 6 months behind
- have been created on or before January 1, 2009
The size of the fund made available to Alabama is $162,521,345, to be dispersed by the state to applicants that meet the basic requirements, plus Alabama’s specific requirements. Successful applicants will receive money for each of twelve consecutive months, with a payment cap of $15,000. If your home is located in a Federally Declared Disaster County, then you may be eligible for help for 18 consecutive months, with a payment cap of $25,000. The application can take up to 6 weeks to process.
The qualification details particular to the state of Alabama for the Alabama Hardest Hit program include;
- The total balance owing on the mortgage can not exceed $258,690
- The arrears from missed payments can not be more than $7,500
- The home owner must already be receiving benefits from the government for unemployment
- The maximum total allowed household income can not exceed $76,440, from all residents 18 and over
To qualify for the Arizona Hardest Hit, the gross family / household income must be no more than 120% of the median income for the county in which the residence is located. A minimum of two monthly payments behind, and no less than 60 days from a Trustee sale date. The maximum loan amount is $50,000, with zero percent interest and no monthly payments. If the applicant can complete the program successfully, then the loan balance is forgiven at the end of the term.
Second mortgage settlements are available up to $5,000 as long as the mortgage balance is greater than 120% of the fair market value of the home.
Unemployment Mortgage Assistance is available up to $50,000, including a Second Mortgage Settlement, a maximum of 24 months of assistance minus the number of rescue payments. Rescue assistance can make a first mortgage current by fixing all past due payments including interest, late fees and any NSF fees, but excluding any legal fees. The maximum number of payments rescued is 12 and the maximum amount of monthly financial assistance is $2,000 (or the current monthly mortgage payment subtract 31% of the borrower’s monthly gross income, excluding unemployment assistance).
To qualify for the Keep Your Home program in California, the homeowner must be unemployed, collecting EDD benefits. Qualified applicants will receive up to $3,000 in monthly mortgage assistance for up to six months, and for home owners who are able to maintain a clean payment history for the three years following the assistance, then the loan need not be paid back.
The Florida Housing Finance Corporation has been directed to make the state’s hardest hit funds available to the unemployed in an effort to provide temporary revenue assistance in addition to home loan subsidies. The Unemployment Mortgage Assistance Program provides home owners with $12,000 to be applied to home loan payments. The home owner must be able to pay 25% of their monthly income towards the monthly mortgage payment, with a minimum of $70. Should applicants have more than one mortgage on their home, then this payment is only available for the payment of the primary mortgage. Qualified applicants must have a hardship based on a loss or reduction of income due to their employment situation.
Florida offers an additional program called the Mortgage Loan Reinstatement Program, which essentially provides the home owner with enough money to bring their mortgage payment to current status, to a maximum of $6,000. The home owner must be able to demonstrate that their employment-related hardship is now over, and that their new situation reduces their monthly home loan payment to less than 31% of their monthly income.
Florida adds the following criteria to the above requirements;
- The balance of the mortgage owing can not exceed $400,000
- Total household income (income from all residents at the location over the age of 18) must be below 140% of the area’s median income as reported by the US Department of Housing.
The Georgia Hardest Hit program outlines a number of other issues that can go towards program eligibility, which are, in addition to the above basic requirements to be approved;
- The applicant must not have an IRS or Georgia state lien
- the home owner must have been current on their home loan payments before the employment-related hardship began
- Loss of income due to a divorce, illness or loss of child support do not qualify as a loss of income for the purposes of this program
- The total balance owing on the mortgage is less than $417,000
- Home owners can not receive help for mortgage payments while in the HAMP trial period, can not use Hardest Hit funds to pay for HAMP trial payments
To qualify for Illinois’ Hardest Hit fund, applicant households must be able to show an income reduction of 25% due to unemployment or underemployment, without having lost the job due to being fired. The homeowner can be behind, or about to be behind in their monthly mortgage payments, with a family household income below 120% of the area median income. The Principal loan balance can not be more than $500,000, and less than 3 months of mortgage payments in liquid assets. The mortgage loan must not be an interest-only mortgage or one with negative amortization. Finally, the current mortgage lender must agree to accept payments.
The maximum payment to the homeowner will be either $20,000 or $25,000, dependent on the county in which the home is located. The fund provides reinstatement assistance for households behind on their mortgage, providing up to 18 months of forward mortgage payments. The applicant has to make a contribution payment of 31% current gross income during assistance term.
Successful applicants to the Indiana Hardest Hit fund program will meet the following criteria;
- Must meet certain income guidelines
- Any delinquent payments on record must have occurred after the hardship
- At least 30% of the applicants gross monthly household income must go towards the monthly payments for principal, interest, home owners insurance and property taxes
- Must own only 1 home, it must be located in Indiana, and the applicant must be a resident of the State of Indiana
- Liquid assets can not exceed 6 months of mortgage-related expenses (excludes retirement accounts)
- Cannot have an active bankruptcy, and if discharged, applicant must be able to prove reaffirmation
- Must attend a job training program, related educational courses or forty hours of volunteer activities per month for each month the applicant receives Hardest Hit fund financial support
Kentucky offers a Unemployment Bridge Program, designed to assist successful applicants in continuing to maintain their mortgage payments. To be eligible, the homeowner must have lost their job or experienced a reduction in income due to the recent change in the economy (must have occurred after January 1, 2009) and be able to demonstrate how these changes has left them no choice but to seek financial assistance from the state of Kentucky.
The maximum amount of assistance is $20,000 or 12 months of assistance, whichever occurs first. Of the $20,000, the maximum amount that may be used for all related fees and payments to bring the mortgage current is $7,500.
Successful applicants must also meet the following criteria;
- The maximum amount of the value of the liens on the property cannot be more than $275,000
- There may be no more than two liens permitted on the property
- Either the applicant’s principal, interest, taxes, and insurance (PITI) must exceed 31 percent of the gross monthly income, or the applicant must have suffered a 15 percent reduction in employment income.
- Liquid assets can not exceed 6 months of mortgage-related expenses (excludes retirement accounts)
- Applicants must sign a letter of hardship indicating the reduction in income they have suffered (also claiming that the loss or reduction was no fault of their own)
- The institution that holds the debt for the home loan must be enrolled as a participating servicer
Michigan offers three programs to assist homeowners who are experience hardships, impacted by recent changes in the economy. The three programs are;
Unemployment Mortgage Subsidy Program
This program offers homeowners the chance to keep their home by helping out with mortgage payments and by correcting any missed mortgage payments which occurred during their period of unemployment. The maximum amount available for each homeowner who requires assistance in becoming current on their mortgage payments is $3,000. In addition, the applicant must show receipt of Michigan Unemployment benefits.
The program will provide up to $750 or 50 percent of the existing mortgage payment, which ever is less. and sent directly to the mortgage provider for a period no longer than one year / twelve months. The balance of the home loan will be withdrawn directly from the homeowner’s bank account each and every month for the duration of the assistance.
Mortgage Loan Rescue Program
Designed specifically to return the homeowner to current status on their mortgage payments, these funds (max. $10,000) can be used towards a delinquent mortgage, delinquent property taxes and any accrued escrow shortages. Homeowners who have a second mortgage can also use these funds to help repair that agreement, however the homeowner must be able to show that the primary mortgage is current. To qualify, the homeowner must be able to show that the hardship that impacted their ability to maintain their mortgage agreement was involuntary or based on recent economin changes, and that they have resolved a recovery plan to get mortgage payments under control and that they are able to carry their mortgage(s) going forward.
Principal Curtailment Program
This fund provides assitance to homeowners who would like to modify their mortgage agreement to be able to make the payment structure something more affordable. The maximum amount of assistance is $10,000, and can be used to modify the primary mortgage agreement, or used to reduce the second mortgage, however if used for this purpose, the primary mortgage must also be current.
This program is designed to help out residents of Mississippi who are unable to maintain their mortgage agreements and need assistance to get back on track or maintain the agreement during the duration of the hardship which has befallen the homeowner. To qualify, there are a number of criteria;
- As with most state Hardest Hit Funds, the homeowner income must be below 120% of area’s median income
- The applicant must be a US citizen, a resident of Mississippi, the home located in Mississippi and be the applicant’s primary residence
- Must be experiencing or about to face a default in their mortgage payments
- The monthly mortgage payment must be greater than 31% of the homeowner’s gross monthly income
- Applicants must create and submit a hardship letter that outlines the reason for the application and has with it supporting documentation
- The homeowner must have owned the property for at least twelve months prior to applying for program
- The remaining balance on the home loan must be less than $271,000 (this includes a second mortgage if applicable)
Successful applicants will receive enough funds to have their mortgage paid for twelve months. If the homeowner is able to qualify and enroll in a state college program, then the mortgage assistance program will be extended for an additional twelve months. Homes located within certain counties within Mississippi can even qualify for an additional six months of financial assistance. If the homeowner / applicant is behind in mortgage payments due to the hardship as expressed with the hardship letter, then the mortgage program can provide up to six months of mortgage payments to help clear up the default amount.
All loans made by the Mississippi Hardest Hit Fund are a zero percent loan for five years, and as long as the homeowner qualifies and successfully completes the program, then there will not be required to pay back the loan unless the home is sold or they receive refinancing from their lender within the five year term of the loan.
The North Carolina Hardest Hit fund offers zero percent loans for between 24 to 36 months, based in which county the applicant resides. The fund allows for $1000 per month to go towards mortgage and related expenses, and residents in the hardest hit North Carolina counties can have that extended from the regular 24 months to 36. Additionally, the money may be used to bring the mortgage payments up to date.
Applicants are eligible if they are unemployed through no fault of their own, or are suffering from a hardship that prevents the homeowner from staying on track. To receive funds, the applicant, must be able to back up claims of unemployment or the hardship with any related documentation, be a resident of North Carolina (and a legal resident of the USA), and have a clean track record of payments with the lender prior to unemployment or hardship.
The Hardest Hit Fund in Nevada has what is called the Mortgage Assistance Program (MAP), and is designed to provide financial assistance for under or unemployed homeowners who have experienced a job loss or income reduction (through no fault of their own). This program will pay for one-third of the principal and interest portion of the monthly mortgage payment, up to a maximum benefit of $500 per month.
To qualify, the applicant must meet some criteria, including;
- The residence in question must be occupied by the owner, and the owner be a legal US resident, and must be living in the home for at least 5 years
- The home loan must have been created on or before January 1, 2009
- Proof of the hardship must be documented and included with the application
- The homeowners maximum income must not exceed 120% of the area’s median income
- Must either be missing or about to miss mortgage payments
- Only applicants with one home may apply
- Total balance owing on mortgage is different in all counties. The following counties have mortgage limits for applicants to receive assistance. They are Clark County ($427,184), Reno / Sparks ($431,189), Other rural Nevada areas ($347,087)
- Applicants who have failed a previous HAMP trial period but were able to complete successfully are not able to apply for this program
The New Jersey Hardest Hit Fund provides financial help to hardest hit residents of New Jersey homeowners (must reside in New Jersey and be a legal US citizens) who have been current and on time with their home loan payments prior to the hardship that has dramatically effected their ability to maintain that trcak records. New Jersey homeowners who are now at risk of losing their homes as result of unemployment or underemployment, the State offers financial assistance in the form of a zero percent interest rate, deferred-payment, second mortgage. The funds from the loan may be used to cover past due mortgage payments or a portion of the monthly home loan payment, and may include other mortgage related expenses such as property taxes, property insurance, and mortgage insurance. Homeowners may be eligible for up to $2,000 per month for a maximum of 24 months.
Homeowners may apply if, within the past 24 months, you or your spouse or civil union partner has become unemployed or have lost wages due to reduced hours or work. To qualify, the employment hardship may not be the fault of the applicant, and have, or are about to, become delinquent in meeting the payment schedule.
The basics of qualifying in New Jersey;
- The homeowner must be both a resident of New Jersey and a legal US citizen
- The home was purchased prior to January 1, 2009
- There is less than $429,619 owing on the property (or less than $550,005 for a two-unit home)
- The homewoner / applicant was current (fewer than one 60-day late payment) on the mortgage payment for at least 12 months prior to the hardship
- The home in question is the only home owned by the applicant
- The homeowner is clear of any bankruptcies
- The applicant has less than 9 months of mortgage and mortgage related expenses in liquid assets