State Housing Authority Announces New Program for Under-Employed Homeowners Struggling to Prevent Foreclosure
Homeowners can apply directly online at StepForwardMichigan.org or call toll-free for assistance at 866-946-7432
LANSING, Mich., July 9, 2012 /PRNewswire-USNewswire/ -- Michigan State Housing Development Authority (MSHDA) Executive Director Gary Heidel today announced that the U.S. Department of Treasury approved revisions to Michigan's Hardest Hit Funds® programs allowing MSHDA to enhance their existing programs and introduce a new program that may help many under-employed homeowners throughout the state. The program changes went into effect July 1 and will increase homeowner and property eligibility as well as raising the funding limits.
"Michigan has been doing an excellent job in getting relief to many of our residents who have saved their homes from foreclosure through MSHDA's Step Forward Michigan programs," Heidel said. "This newly approved program and existing program enhancements will allow us to take another step forward by providing the means for under-employed homeowners to stay in their homes."
Director of MSHDA's Homeownership division Mary Townley and her staff designed the new program based on trends they have seen develop over the past two years in distributing the federal Hardest Hit Funds to help Michigan residents avoid foreclosure.
"Michigan was one of the first five states to receive these federal funds and we have helped thousands avoid foreclosure," Townley said. "We could see the need for some revisions and adjustments based on what our customers told us. That motivated us to create the Modification Plan program that we have just launched."
The Modification program provides help for homeowners that have fallen behind on their mortgage and are still struggling to make their monthly payment. The maximum program reservation is $20,000, and the funds are used to pay the delinquent amount so the lender can modify the existing mortgage terms to get the homeowner to a more affordable or sustainable payment. These funds can also be used toward a second mortgage lien delinquency if the first mortgage account is documented as current.
The new Modification Plan is in addition to three existing programs which have been enhanced – all designed to help qualified homeowners prevent foreclosure because of unemployment, under-employment, catastrophic medical costs, divorce, and other life-changing events as well as situations occurring because of the less-than-favorable economic environment. The three programs are:
Unemployment Mortgage Subsidy Program - helps unemployed homeowners stay in their homes by providing monthly mortgage payment assistance directly to their mortgage lender. The program may now provide up to the lesser of $1,000 or 50 percent of a homeowner's monthly mortgage payment each month for a maximum of 12 months. The homeowner is responsible for the remaining portion of the monthly payment. If you are currently delinquent on this mortgage, this program may also contribute available funds, not already reserved for the monthly payments, towards the delinquent mortgage amount. The maximum program reservation has been increased from $10,000 to $20,000.
Mortgage Loan Rescue Program - helps homeowners that have fallen behind on their mortgage and need help catching up. The maximum program reservation was $10,000 and has been increased to $20,000. Assistance is paid directly to the lender to be applied toward the delinquent amount. These funds can also be used toward second mortgage lien delinquency if the first mortgage account is documented as current and you can continue to sustain both mortgage payments in the future.
Principal Curtailment Program -provides help for homeowners who are struggling to pay their mortgage payment and their current loan balance is higher than the value of their home. Maximum program reservation is $10,000 but require a one-to-one match from the lender to equal a total amount of assistance of $20,000. These funds are used towards principal reduction so the lender can modify the reduced principal balance to get to a more affordable or sustainable payment. These funds can also be used toward second mortgage lien delinquency if the first mortgage account is documented as current and you can continue to sustain both mortgage payments in the future.
"The Modification Plan program offers just one more way to help Michigan homeowners and their families stay in their homes and remain contributors to the successful rebirth of Michigan's economy," Townley said. "You can take that first step toward success by applying on line at StepForwardMichigan.org or calling toll-free at 866-946-7432."
The Michigan State Housing Development Authority (MSHDA) provides financial and technical assistance through public and private partnerships to create and preserve decent, affordable housing for low- and moderate-income residents and to engage in community economic development activities to revitalize urban and rural communities.*
*MSHDA's loans and operating expenses are financed through the sale of tax-exempt and taxable bonds as well as notes to private investors, not from state tax revenues. Proceeds are loaned at below-market interest rates to developers of rental housing, and help fund mortgages and home improvement loans. MSHDA also administers several federal housing programs. For more information, visit www.michigan.gov/mshda.
SOURCE Michigan State Housing Development Authority