Clock ticking down for emergency-loan help to struggling homeowners
Better get a move on if you think you'd qualify for an emergency bridge loan to stave off foreclosure. The deadline is closing in.
The state has about $28 million remaining of the $40 million in federal funds, and two-and-a-half months left to commit it all. Applications for the Emergency Mortgage Assistance program that aren't approved by Sept. 30 -- not received, approved -- can't be funded.
The state Department of Housing and Community Development says its underwriting staff need about two weeks to process an application, so Sept. 15 is as long as you'd want to wait. Earlier is better, in case there are any hitches.
Maryland officials, nonprofit staffers and other volunteers knocked on doors yesterday morning in Baltimore's Ednor Gardens-Lakeside neighborhood as part of an outreach campaign. They visited 500 homes, leaving door hangers with information when no one was there. (The photograph above, taken by Rosa Cruz with the state housing department, shows volunteers from Civic Works. From left to right: Muhammed Shodeinde, Bridgette Canada and Terrell Binford.)
The no-interest, forgivable loans are for homeowners who lost their jobs, took a cut in pay or are dealing with a health crisis. You must be behind on your mortgage by three to 12 months. Here's how the program works:
If you qualify, you can get a loan of as much as $50,000 to cover your past-due amount and help pay for up to two years of future mortgage payments. If you stay in your home and follow the rules, you aren't on the hook to make payments on the emergency loan for five years -- at which point the it's forgiven.
Cruz, who is a spokeswoman for the state Department of Housing and Community Development, said the agency had about 880 applications as of July 1, almost 300 of which had been approved for a total of $11.4 million. About 350 more were being processed and the rest -- 229 -- had been rejected.
More details here about the program and how to apply.
Maryland is one of just five states running their own versions of what is known nationally as the Emergency Homeowners' Loan Program. Elsewhere, the program is administered by NeighborWorks America.
The U.S. Department of Housing and Urban Development, which oversees the effort, said yesterday that homeowners who fall under NeighborWorks' umbrella must turn in a "pre-applicant" screening worksheet by July 22 -- next week -- if they want a shot at getting one of the loans.
Categories: Foreclosure help, The foreclosure mess
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Comments
I'm not clear on - "If you stay in your home and follow the rules, you aren't on the hook to make payments on the emergency loan for five years -- at which point the it's forgiven."
Do you have to repay the loan or not?
Posted by: Michelle Brown | July 14, 2011 11:22 AM
It's a forgivable loan, much like the homebuyer downpayment assistance that starts off as a loan and slowly converts into a grant you don't have to repay.
Here's the description from the program website: "The EMA loan is in the form of a zero interest loan with no payments for five years after the end of the Assistance Period. From that point, so long as all loan conditions are maintained, the loan balance due shall decline by 20 percent annually until the Note has a zero balance after five years. If homeowner fails to meet any of the conditions, then the applicable balance of the loan at that time will become payable."
Posted by: Jamie Smith Hopkins | July 14, 2011 11:44 AM