With the threat of foreclosure looming large for many homeowners across the United States, the U.S. Department of Housing and Urban Development (HUD) has partnered with NeighborWorks America to launch the Emergency Homeowners’ Loan Program (EHLP) to help those at risk of losing their homes. The program was created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and has $1 billion of funding from Congress.
HUD is in charge of implementing EHLP, and NeighborWorks says the program’s purpose is to assist homeowners who have experienced a reduction in income and are at risk of foreclosure due to involuntary unemployment, underemployment, due to economic conditions or a medical condition.
“Through the Emergency Homeowners’ Loan Program the Obama Administration is continuing our strong commitment to help keep families in their homes during tough economic times,” says HUD Secretary Shaun Donovan. “Working with our community partners across the nation through NeighborWorks America, we are pleased to launch this program today in 27 states and Puerto Rico to help families keep their homes while looking for work or recovering from illness.”
The program functions by giving out interest-free loans to homeowners who meet the program’s guidelines. NeighborWorks says the borrowed funds will pay a portion of an approved applicant’s monthly mortgage including missed mortgage payments or past due charges including principal, interest, taxes, insurance, and attorney fees; a homeowner can borrow up to $50,000, or two years’ worth of loans to supplement mortgage payments, whichever comes first. The EHLP program is expected to assist 30,000 homeowners through the program, with an average loan amount of about $35,000, says NeighborWorks.
The $1 billion of funding for the EHLP program complements the $7.6 billion in the Hardest Hit Fund, established for the states hardest hit by the housing crisis; with today’s launch, says HUD, mortgage assistance is now available for unemployed and underemployed homeowners in every state.
For more information, including a list of states offering the EHLP program, click here.
Written by Alyssa Gerace