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  • It seems like the much-awaited Emergency Homeowner Loan Program may still see the light of day. It was deemed overdue when it was first conceived in the beginning of 2010 and it is considered much more so in July 2011. Yet, after it was approved in the House of Representatives in March 2011 it only awaits the signature of the Senate for approval. There are thousands of unemployed workers which await this (or any other) program to assist them with their mortgage payments. If passed by the senate

    the program will provide loans of up to $50,000 (estimates set the average loan at $35,000) to around 30,000 unemployed workers. Who will receive this assistance? What are the requirements or eligibility criteria for this mortgage assistance program? Although some of the details have still not been published, the Department of Housing and Urban Development has provided a summary with the main requirements applicants must meet to qualify for bridge-loans under the Emergency Homeowner Loan Program. This article will list and comment on these requirements.


    Obviously, this program is not targeted at the wealthy or those with enough assets to care for themselves. In order to focus the target group of the program, the Department of Housing and Urban Development has limited the scheme to unemployed workers which had a household income equal or less to 120 percent of the area median income (AMI) in their region. This income includes, wages and salary workers as well as self-employed workers. For example, the area median income of San Francisco, California, in 2010-2011 was $93,400. Only applicants with total incomes of $112,080 or less can apply for this program.

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    However, the total income is not the only income requirement. Applicants must also have seen an income reduction of at least 15 percent since they lost their employment. If there has not been a significant reduction in income since unemployment the unemployed worker must use the income available to him to continue paying the mortgage.


    Applicants must be already three months or more behind their payments and must have already received a notice from their lenders informing them of an intention to foreclose on their mortgages. Proof of this may consist of any type of written notification between the lender and the borrower that indicates three months have gone by since the last mortgage payments were made and the intention to foreclose on the mortgage.

    Ability to Repay

    The applicant must also be reasonably likely to repay the mortgage within two years of entering the program. This is determined by the total debt to income ratio of the applicant. To qualify the debt to income ratio of the applicant must be below 55 percent. For example, if your monthly income is $2,000 your housing costs must be below $1,100 a month.


    A final requirement for all applicants is that they must live in the home they are requesting financial help for as their main place of residence. This program cannot be used for investment or vacation homes.

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