RICHMOND, VA (WWBT) - The Federal Government is going to give away money to save people from foreclosure. HUD is offering to help homeowners with mortgage payments before they lose their homes. It's funded through your taxes.
If you were at least three months behind on your mortgage as of June 1, and at risk of foreclosure, the Federal Department of Housing and Urban Development is ready to help with the Emergency Homeowners Loan Program, or EHLP.
We asked Kelly Gill-Gordon, with the Virginia Housing Development Authority, to break it down for us. "It's for individuals that are unemployed or under-employed due to the economy or medical conditions."
HUD is offering 0 percent interest emergency loans to make your mortgage payments for up to two years, or a maximum of $50,000. Said Gill-Gordon, "This assistance will help with their mortgage payments, they'll still have to make a contribution which will be 31 percent of their income or $150, whichever is more."
First you'll have to pre-apply and enter a lottery. Those selected will have to apply and meet the criteria. A non-profit credit counseling agency called CredAbility will review the applications and notify the homeowners by October first.
Here's the bonus. If you get one of these loans and you make every house payment on time for the next five years, you never have to pay the money back. That's right, free money.
Otherwise the loan is secured by a junior lien against your principal residence.
So here's the bottom line. It's part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. HUD will give $1 billion in these loans. EHLP won't solve the foreclosure crisis.
Said Gill-Gordon, "This assistance is very limited and there will probably be many more people eligible for the program than money is available. It should assist 1,200 people throughout the state."
But it could keep up to 30,000 homeowners nationwide in their homes and out of foreclosure.