In cases of temporary financial hardship, a small amount of assistance may make a large difference for a family. Housing finance agencies can craft these emergency loans to meet local needs and economic realities. Small and/or short-term loans are clearly not capable of preventing foreclosure for every family, but they play an important role in a community’s overall foreclosure prevention strategy by helping families stabilize their finances before delinquencies get out of control. Temporary financial assistance products are often designed to help families retain stable housing during unemployment or sudden losses of income.
The table below summarizes the assistance offered by five different short-term emergency loan programs. Click on the state to read more.
State
| Loan Program
| Maximum Loan
(in total $)
| Maximum Loan
(in number of mortgage payments)
| Interest Rate
|
Pennsylvania
| Homeowners' Emergency
Mortgage Assistance Program (HEMAP)
| $60,000
| 24 months
| 9 percent
|
North Carolina
| Home Protection Pilot Program | $20,000
| 18 months
| 0 percent
|
Delaware
| Delaware Emergency Mortgage
Assistance Program (DEMAP) | $15,000
| 12 months
| 3 percent, simple
|
Maryland
| Bridge to HOPE Loan Program | $15,000
| 24 months
| 0 percent
|
Ohio
| Ohio Home Rescue Fund
| $3,000 or $5,000
depending on household income
| 3 months
| 0 percent
|
PennsylvaniaIn Pennsylvania, the Homeowners' Emergency Mortgage Assistance Program (HEMAP) will provide either a single loan to bring a mortgage current or continuing mortgage assistance for no more than 24 months, up to a maximum of $60,000. Monthly payments vary with household income to ensure that HEMAP borrowers do not pay more than 40 percent of household income on housing costs. The minimum monthly payment is $25 per month.
For households repaying based on the 40-percent calculation, the loan has an interest rate of nine percent; interest does not accrue when the loan is on a $25 per month repayment plan. Lenders are required to inform borrowers of the HEMAP program if a mortgage is at least 60 days delinquent. Funding is provided through a combination of state appropriations and repayment of HEMAP loans.
See the
case study of Pennsylvania's mortgage assistance programs for more information about HEMAP and other loan programs to help Pennsylvania homeowners.
Back to topNorth CarolinaIn 2004, North Carolina initiated the Home Protection Pilot Program to prevent foreclosures in households affected by job loss. In selected counties, workers who have lost their jobs may receive a no-interest loan for: $20,000, an amount necessary to cover 18 months of mortgage payments, or the minimum amount needed to bring their loans current -- whichever is lowest. Repayment is deferred for 15 years or until the home is sold, refinanced, or no longer a principal residence. Applicants also receive a 120 day temporary stay of foreclosure upon receipt of their application. More information on North Carolina's Home Protection Pilot Program is available on the
North Carolina Housing Finance Agency web site.
Back to topDelawareThe Delaware Emergency Mortgage Assistance Program (DEMAP) provides loans to help families experiencing a temporary financial hardship due to circumstances beyond their control. Borrowers that are at least 60 days delinquent and at risk of foreclosure can obtain a DEMAP loan for up to $15,000 or 12 months of mortgage payments. The loan may either be received as a single payment to bring the mortgage current or a series of smaller, ongoing payments to assist with the mortgage for up to a year. To qualify, borrowers must have previously had a good credit history and must have a total family income of no more than 115% of the state's median annual income. The minimum payment on a DEMAP loan is $40 per month. More information on DEMAP can be found on
the Delaware State Housing Authority web site.
Back to topMarylandMaryland's Bridge to HOPE Loan Program provides loans of up to $15,000 to help families stay in their homes while working on a permanent solution to their mortgage affordability problems. Bridge to HOPE loans can be used either to cover delinquent mortgage payments and taxes or to help families with ongoing mortgage payments for up to 24 months. In the case of ongoing loans, the maximum monthly assistance amount is based on borrowers' total monthly debt payments (for both housing and other household debt). Loans have 0 percent interest, and repayment is deferred until either (1) the property is sold or transferred or (2) the existing mortgage is refinanced.
To qualify, borrowers must have stable employment; their credit history must have been good prior to the current mortgage delinquency; and they must have a subprime or nontraditional mortgage. Eligibility limits for household income and the home's appraised value vary in different parts of the state. Bridge to HOPE loans can be used for one-unit, owner-occupied properties, including condos, attached or detached homes, modular homes, and other manufactured housing.
Families must work with a housing counseling agency on an action plan for resolving their mortgage affordability problems and maintaining ownership of the home.
Bridge to HOPE is part of Maryland's Home Owners Preserving Equity (HOPE) Initiative, which includes homeownership counseling and other financial assistance options. See the
Low-Interest Refinance Loans section to learn about Maryland's Lifeline Refinance Mortgage Program, or see the
Refinancing with Flexible Underwriting section to learn about the Maryland's Homesaver Refinance Mortgage Program.
Back to topOhioIn Ohio, families at risk of foreclosure due to a temporary financial setback may be able to get help from the Ohio Home Rescue Fund. Loans with zero percent interest are available to families earning up to 115 percent of area median income (AMI) or to families with higher incomes in two cases: (1) if the home is in a HUD-targeted area, families can earn up to 140 percent of AMI; and (2) if the home was purchased through the Ohio Housing Finance Agency's first-time homebuyer program, families are not subject to an income limit. Funding comes from the state's housing trust fund.
To qualify, families must demonstrate both the cause of their setback and their ability to continue making mortgage payments if they receive the rescue loan. All families must participate in homeownership counseling.
Loan limits and repayment terms vary with borrowers' income. For families earning less than 65 percent of AMI, the maximum loan is $3,000 or three months of mortgage payments. Repayment is deferred and forgivable after three years. For families earning 65 percent of AMI or more, the loan limit is $5,000 or 3 months of mortgage payments. Repayment is deferred until the sale or transfer of the property.
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Establish a foreclosure prevention task force to facilitate a comprehensive approach
Reduce the risk of foreclosures in the future
Help families regain stability after a foreclosure
