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  • Have you heard about the new federal mortgage help program? We are talking about the Emergency Homeowners’ Loan Program (EHLP) managed by HUD. Although this program is still in the development stages, it could prove to be such a huge help for borrowers we feel you should know what information HUD has provided up to now about this exciting new program.

    Goal

    The goal of the Emergency Homeowners’ Loan Program is to to help homeowners who are struggling to pay their mortgages due to a drop in their income of at least 15 percent because of unemployment or underemployment due to no fault of their own. This means that unemployed workers who were laid off due to lack of work or whose hours were reduced may receive help with their mortgage payments.

    How Will The Program Work?

    The main tool the EHLP will use to assist homeowners is to grant eligible homeowners with a bridge loan of up to $50,000 to pay for up to 24 months of monthly payments, as well as delinquent mortgage, tax and insurance payments.

    Under this program, borrowers must use 31 percent of their income to pay for their mortgage and the EHLP will pay the balance. However, the minimum payment for any homeowner is $25. The program will cover for arrearages and monthly payments for up to 24 months or until the loan reaches $50,000, whatever happens first.

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    Repayment

    The beauty of this program is you do not have to repay the 5-year term loan, just as long as you regularly pay your monthly mortgage payments. Every year the balance of the loan drops by 20 percent, so by the end of the five years the balance will be extinguished if the borrower has followed the mortgage payments schedule.

    Which States Will Qualify?

    The EHLP program will be exclusive for states with a high unemployment who are not benefiting from funds by the Treasury’s Innovation Fund for Hardest Hit Housing Markets. This includes the following 32 states:

    Alaska

    Arkansas

    Colorado

    Connecticut

    Delaware

    Hawaii

    Idaho

    Iowa

    Kansas

    Louisiana

    Maine

    Maryland

    Massachusetts

    Minnesota

    Missouri

    Montana

    Nebraska

    New Hampshire

    Mexico

    New York

    North Dakota

    Oklahoma

    Pennsylvania

    Puerto Rico

    South Dakota

    Texas

    Utah

    Vermont

    Virginia

    Washington

    West Virginia

    Wisconsin

    Wyoming

     

    Eligibility

    The next article will look into the eligibility criteria of the EHLP program as specified by HUD. Notice that this program is still in development and the program’s terms could change at any moment.

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