Thursday, April 28, 2011

Applications Flood Florida Program for Unemployed Homeowners

In just one week's time, the Florida Housing Finance Corporation has received nearly 9,500 applications from unemployed homeowners seeking financial assistance through the state's Hardest-Hit Fund (HHF) program. Following a successful six-month pilot run in Lee County, the state housing agency launched the program statewide on April 18, making it available to troubled homeowners in all 67 counties. Florida has received more than $1 billion from the U.S. Treasury to fund the program.

Florida’s effort is two-fold. The Unemployment Mortgage Assistance Program (UMAP) will provide up to $12,000 to pay monthly mortgage and escrowed mortgage-related expenses for up to six months, or until the homeowner can resume making mortgage payments. Homeowners in this program are required to pay 25 percent of their monthly income toward their mortgage payment, with a minimum payment of $70 per month.

The Mortgage Loan Reinstatement Payment Program (MLRP) will provide up to $6,000 to bring the homeowner’s past-due first mortgage current if the homeowner can show the ability to resume making mortgage payments on their own. For a homeowner who received funding from the UMAP program, any unused funds up to $12,000 may be used in addition to MLRP funds to help bring the first mortgage current.

Assistance through both programs will be in the form of a 0 percent, deferred-payment loan. The loan can be forgiven over a five-year period, at a rate of 20 percent each year.

An eligible homeowner:

Must be a Florida resident;

Must occupy property as primary residence (the property cannot be vacant, abandoned or rented);

Borrower/co-borrower must be unemployed or underemployed through no fault of his/her own, which makes the first mortgage unaffordable;

Must have documented total household income at or below 140% of the area median income (AMI), adjusted for household size;

Must have an active checking/savings account that can be debited by the ACH method of funds transfer;

May not have unencumbered assets of $5,000 or more, or three times the current monthly mortgage payment (whichever is greater);

Cannot have a bankruptcy that has not been discharged or dismissed; and

Cannot have been convicted of a mortgage-related felony in the last 10 years.

The current mortgage:

Must be serviced by a participating lender, who agrees to accept payments on behalf of the homeowner;

Must not be more than 180 days past due at the time of application;

Must have been originated on or before January 1, 2009; and

Must have an existing principal balance of less than $400,000.