'Free' Home Loans - first of 60 cities getting you tax $
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Long-promised loan aid for jobless is launched
June 21, 2011|By Jenifer B. McKim, Globe Staff
A federal program that will provide interest-free loans to unemployed homeowners so they can make mortgage payments was launched yesterday after months of delays, with $61 million earmarked for Massachusetts.
The Department of Housing and Urban Development and NeighborWorks America, a Washington, D.C., nonprofit that is helping to administer the $1 billion program, said it will benefit about 30,000 homeowners nationwide — including more than 1,000 in Massachusetts. Applications are due by July 22, and officials are anticipating needing a lottery to determine who receives money. Those who meet eligibility requirements will be able to borrow up to $50,000 over a two-year period. Under some circumstances, the money will not have to be paid back.
The program, approved by Congress last summer, was supposed to be up and running by the end of 2010, but various complications slowed its start date.
Lewis Finfer, executive director of Massachusetts Communities Action Network, a Boston nonprofit, said about 1,260 Massachusetts homeowners are expected to qualify for the funds, which must be allocated by the end of September.
“We know there are so many people in need,’’ said Finfer, who has been pushing for help for unemployed homeowners for several years. “This will make the difference between people saving their homes and losing their homes.’’
To qualify, homeowners must be able to prove they have had a drop in income of at least 15 percent due to job loss, wage cuts, or a health emergency, and be at least three months behind on their mortgage payments. Borrowers also must meet certain income requirements, which differ by region. In the Boston area, a family of four’s income could not have exceeded more than $110,150 before the drop in salary, according to federal documents.
In some cases, the federal loans will turn into gifts. Borrowers who remain in their homes and stay current on mortgage payments for five years — after they stop receiving the federal help — will have their debt balance reduced by 20 percent annually until it is eliminated.
The program, which targets residents in 27 states and Puerto Rico, is meant to complement a similar effort managed by the Treasury Department for states that were “hardest hit’’ by the US financial crisis, according to federal officials. Massachusetts was not part of that program.
Local agencies, including Urban Edge Housing Corp. and Nuestra Comunidad Development Corp. in Roxbury, will be working with homeowners to help them through the new program’s application process.
The federal assistance comes as the number of foreclosures mounts in Massachusetts and around the country, even though the rate of increase has slowed. Locally, as many as 56,000 homeowners were at least 90 days late on their mortgage, but not yet in the foreclosure process, according to a recent study by the nonprofit Massachusetts Housing Partnership.
In Worcester, Mayor Joseph C. O’Brien held a press conference yesterday to highlight the new program. The central Massachusetts city has been severely affected by the foreclosure crisis. “These funds will help hard-working families stay in their homes and help stabilize neighborhoods,’’ O’Brien said.
To receive a loan application or get more information, call 855-346-3345 or visit EHLPconsumers.asp.
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Well damn - why pay your mortgage when the fricking Fed will bail you out; interest free, or no repayment required.
Just fricking unbelievable. |
