Federal Homeowner Loan Program Falls Short of Goals
Federal Homeowner Loan Program Falls Short of
Goals
According to statistics released Monday by the US Department of Housing and Urban Development, a $1 billion program launched to bring aid to struggling homeowners will fall far short of its goals due to strict requirements that kept thousands from qualifying. The Emergency Homeowners' Loan Program, for which 100,000 people have applied, has only been able to help between 10,000 and 15,000 of those applicants. The deadline for the agency to approve applications is this Friday, meaning the program will fall far short of its goals.
Those who do get approved for the program are expected to receive between $35,000 and $45,000 in assistance. The program was included in the Dodd-Frank reform bill, passed last year, with the goal of helping struggling homeowners who could not get help under other programs like the mortgage modification plan. The program was modeled after a very successful state program that has helped tens of thousands of Pennsylvania residents since 1983.
Under the program, the federal government offered interest-free, forgivable loans to homeowners who have lost at least 15 percent of their income because of the economy or a medical issue. Applicants had to be at least 90 days behind on their mortgage payments, in jeopardy of losing their home to foreclosure, and show evidence that they could resume payments once they found a job.
Approved applicants receive as much as $50,000, or 24 months of assistance, whichever was reached first. The initiative bogged down, however, as the result of various delays and requirements. The original launch of the program was delayed by six months, finally launching in June. Applicants were originally given just six weeks to submit their applications, though that deadline was later pushed back to mid-September.
According to statistics released Monday by the US Department of Housing and Urban Development, a $1 billion program launched to bring aid to struggling homeowners will fall far short of its goals due to strict requirements that kept thousands from qualifying. The Emergency Homeowners' Loan Program, for which 100,000 people have applied, has only been able to help between 10,000 and 15,000 of those applicants. The deadline for the agency to approve applications is this Friday, meaning the program will fall far short of its goals.
Those who do get approved for the program are expected to receive between $35,000 and $45,000 in assistance. The program was included in the Dodd-Frank reform bill, passed last year, with the goal of helping struggling homeowners who could not get help under other programs like the mortgage modification plan. The program was modeled after a very successful state program that has helped tens of thousands of Pennsylvania residents since 1983.
Under the program, the federal government offered interest-free, forgivable loans to homeowners who have lost at least 15 percent of their income because of the economy or a medical issue. Applicants had to be at least 90 days behind on their mortgage payments, in jeopardy of losing their home to foreclosure, and show evidence that they could resume payments once they found a job.
Approved applicants receive as much as $50,000, or 24 months of assistance, whichever was reached first. The initiative bogged down, however, as the result of various delays and requirements. The original launch of the program was delayed by six months, finally launching in June. Applicants were originally given just six weeks to submit their applications, though that deadline was later pushed back to mid-September.
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