Local housing counselors are racing to sign up unemployed and underemployed homeowners by July 22 so they can qualify for federal loans that cover a portion of their mortgage payments for up to 24 months.
These Emergency Homeowners Loan Program assistance loans (EHLP) also pay off all "eligible" arrearages on the existing mortgage, according to the Department of Housing and Urban Development.
HUD is relying on NeighborWorks America and its local organizations and housing counselors to identify and qualify struggling borrowers for this $1 billion assistance program.
The department estimates the program could aid up to 30,000 at-risk borrowers with an average loan of $35,000.
However, these funds have to be obligated by Sept. 30 under the program approved by Congress last summer.
To qualify, delinquent homeowners must document that they have suffered at least a 15% drop in income and their total income does not exceed $75,000 or 120% of the area median income.
Eligible candidates are expected to use 31% of this income to cover part of their monthly mortgage payment. The zero-interest EHLP loan will cover the rest.
HUD was slow in getting the program guidelines out and the funds have to be obligated by September 30 or they go back to the U.S. Treasury.
"Homeowners facing foreclosure are seeking help wherever they can find it," said NeighborWorks chief executive Eileen Fitzgerald. "So we encourage homeowners to submit their information now [before the July 22 deadline] in order to find out if they qualify for this new assistance program."
