On the brink of foreclosure? The federal government has issued a new program that would give up to $50,000 dollars in “interest-free, forgivable loans” secured by liens against the existing home. The loans would only be available to those in danger of foreclosure due to unemployment, underemployment or medical issues. For all that apply, only 1,405 Minnesotan homeowners will be chosen from the pool of eligible applicants. Applications will only be accepted through July 22, 2011.
This program is supposed to reduce the number of foreclosures in the state by 5% or more, which is a step in the right direction considering the 25,673 foreclosures last year in Minnesota. This will help current Minnesotans in foreclosure, but it is too late for people who have had difficulties from 2007-2010. The program was created by HUD, which allocated over $50 million to use in Minnesota over the next two years.
The main purpose of this new program is to help homeowners weather the downturn in the economy, but the program does reserve the right to cut off funding if a recipient’s income returns to original levels made two years prior. Loans given to property owners will be forgiven by 20% every year, making the loans completely curable in five years. However, government has set forth certain qualifiers to become eligible. These qualifiers include:
- Being unable to make mortgage payments for the past three months or longer.
- Living in the house.
- Have faced an income decline of at least 15% because of unemployment, underemployment, or medical issues.
- Households of four within the Twin Cities must make less than $100,800 annually.
Once the July 22 application deadline is reached, applicants will undergo a more thorough screening process to become eligible for one of the 1,405 chances to receive a loan. Given the unique nature of this program, many believe it is a one-time opportunity, so make sure to apply if you are an eligible homeowner!
If you would like to discuss your options, Tom Scott of Remax Advantage Plus and the Twin City Real Estate Team work with local attornys that would offer a free consultation and legal advice. Depending on your situation, the attorney may choose to work with you at no additional cost as they are also compensated by the bank during a short sale if you elect that as an option.
You can reach us at 612-384-2178 or TomScott@Remax.net