Thursday, October 7, 2010

"The New Normal" - Part III: HUD Earmarks $46.6 Million Aid For Virginia Homeowners At Risk of Foreclosure Due to Unemployment or Illness

The US Department of Housing and Urban Development has an Emergency Homeowners Loan Program that offers up to $50,000 to eligible borrowers at 0% interest rate for up to 24 months.  The $1 Billion program was announced in August, but the details were released on Tuesday, October 6.   Virginia is #9 in $ on the list of 32 states eligible for this program.  Designed for "low- to middle-income working families," eligibility requirements include:
  • Borrowers must have a record of making mortgage payments on time
  • Household's yearly income may not exceed 120% of the area median income 
  • Household must have income reduced by at least 15% in two years due to sudden unemployment, underemployment or a medical condition
  • The home must be the borrower's primary residence and at risk of foreclosure
According to Housingwire, "Borrowers must meet with their local NeighborWorks division or state finance agencies with HUD approved standards to receive funding."
Homeowners needing assistance: Piedmont Housing Alliance.   HUD has further resources for foreclosure avoidance/assistance in Virginia.  

Charlottesville / Albemarle area unemployment has more than doubled in the past two years.  
While the rate is lower than nationally, median home prices are significantly higher than the national number, which means somebody who is unemployed or underemployed,  let alone ill, may fall behind more quickly.  This is a much-needed program.  1 in 4 Va mortgage holders owe more than their house is worth--whether they're employed or not--but having to face moving while jobless (unless it's for a new job) can be tragic.

Related Reading:
The New Normal - Part I
The New Normal - Part II - Banks Halt Foreclosures Due to Widespread Fraud

"The New Normal" is a multi-part series looking at local and national issues impacting housing.  The Federal Government has many programs (with varying degrees of success) in place to help homeowners avoid foreclosure or achieve a short sale.   But the Gov't isn't just assisting current mortgageholders;  the Federal Government owns or guarantees more than 96% of mortgages originating in the past two years.


rfs said...

Question on eligibility --- how can a homeowner be simultaneously making mortgage payments on time and at risk of foreclosure? I am just saying - can't have it both ways

Anonymous said...

@rfs B/C your savings account is wiped out. The savings account where you had 6 months of mortgage payments stashed away in the event you lost your job.

Oh, wait, that's so unAmerican.

rfs said...

Guess what I am trying to say are not at risk of foreclosure until you've missed atleast 4 but probably as many as 24 payments depending on how slow the lender/note holder/trustee/the dog ate my note so I can't produce it person is. And if you are late, then your not current...

John Doe said...

rfs, Certainly somebody who has lost a job and has no (or low) savings/401(k) would be automatically "at risk" for foreclosure and should be seeking help / contacting their lender ASAP.

rfs said...

Having worked with lenders in the past, being "at risk" does not really get you much in terms of help from a lender. They basically will not help until you are ACTUALLY late by atleast 30 days... which might undermine eligibility because at that point you are not current. Once you pay, you are then current and are no longer "at risk".