Top Home Relief Programs
If 2020 has left you house poor and facing eviction or foreclosure, you still have options. See if you qualify for these top home relief programs today!
The Covid-19 pandemic of 2020-2021 impacted Americans across many sectors, including mortgages. Out of work, furloughed, or reduced to working from home, many U.S. workers found themselves unable to meet their financial commitments and faced eviction. The federal government stepped in to place a moratorium on evictions. During this time many government-sponsored enterprises (GSE) were developed to provide relief to homeowners who were affected adversely by the Coronavirus.
In addition to GSE programs, private lending institutions also created independent actions to provide their own home relief programs for their customers. If you are worked about making your house payments the following home relief programs can help. Find out what the programs are, how to apply for them and how to find out if you are eligible to receive assistance.
What can a home relief program do?
Home relief programs, also known as mortgage stimulus programs, seek to bring relief to beleaguered homeowners impacted in the wake of Covid-19. With many mortgage relief efforts ending soon, it is important to know which programs are still in force and what you can expect them to help with. In general, most home relief programs either help you to refinance your home so that you make lower payments, or they help you restructure your loan so that it buys you some breathing space.
Who offers home relief programs?
Many agencies and programs exist to assist homeowners with their mortgages. The federal government offers several programs. Many them are dependent on the type of loan you currently have and your income level.
This home relief program is maintained and administered by the US Treasury. This program is only available in those states hardest hit economically by the pandemic. Each state receives federal aid and then is responsible for determining who is awarded the money. Mortgage assistance is usually offered as part of the unemployment package, or they work with in-state agencies to reduce the overall principal of the home. In some cases, where a mortgage reconciliation is not possible, this agency helps you to find housing that is more affordable.
This program ended in most states as of December of 2020.
Lending Institution Options
The first place point of contact when you fear falling behind on your mortgage holder. Often, they already have programs in place designed to help you avoid foreclosure. Some of those options generally include a loan modification, mortgage forbearance or a refinancing option.
Mortgage Forbearance: A mortgage forbearance is where you speak with your mortgage company to see if you might pause your mortgage payments while you weather your financial hardship. If you have been a good customer with few or zero late payments the chances are good, they will agree. Most allow between one to three months pause on making payments. These payments are not dismissed and when you eventually begin to make payments again, they remain. Often, they tack them on to the end date of the loan, essentially extending the loan out by one to three months.
Mortgage Loan Modification: A loan modification is a process that you work out with the bank to reduce your monthly payment to an affordable level. In some instances, this means extending the life of the loan. For example, if you had a 15-year mortgage, they may agree to extend the loan to a 20 year mortgage, thereby lowering your out of pocket expense per month.
Home Relief Refinancing: Currently, with housing rates as they are, many homeowners are benefiting from the refinancing option. This can be done with any lending institution, not just the company your current mortgage is with. This allows you to find the bank willing to give you the best deal. It is possible to lower your monthly payments by hundreds of dollars if you purchased your home with more than 5% interest.
If you qualify for this program you can have your mortgage reduced by at least 31% for up to a year. In some cases, it suspends your payments for a solid year. Mortgages that were obtained using Fannie Mae or Freddie Mac mortgages are not eligible as they have their own similar assistance programs. This program is managed by the federal Housing and Urban Development agency (HUD). Speak with your local HUD representative at your public housing authority office.
If you having to sell your home for below market value (called a short sale), there is a home assistance program to help you. HAFA is a government backed program that gives homeowners $3,000 toward their relocation efforts after as short sale. It is also possible with this program to have the total mortgage debt forgiven so that the new owners may own the home without any liens.
High-LTV Refinance Option (HIRO)
If you are upside down in your mortgage, then this home assistance program helps. When you are upside down in your mortgage it means that your home has lost value and you basically owe more than it is worth. In these instances, you have zero equity in the home. This program is only for those whose mortgage was backed by Fannie Mae. If you are not sure whether your loan is Fannie Mae or not, you can use their quick search tool.
How to Qualify for Home Assistance Programs
As a rule, the help you receive or qualify for depends largely on the type of loan you have. For example, if your loan was a conventional loan, you often qualify for a three-month forbearance plan. However, if your loan was an FHA, USDA, or VA type of loan then you are eligible to receive up to 9 months or more forbearance plan. In most instances, you must go this route first before applying for other home assistance programs. If a loan modification is needed, then you may benefit from the new mortgage stimulus program that aims to lower your payments by at least 25%.
Many programs offer pre-screening tools that allow you to determine your eligibility before filling out and submitting numerous forms. Most offer online applications and streamlined submission processes. In most instances the home relief program takes effect in as little as a few weeks. For a refinancing program it can take up to a month.