Unemployed homeowners struggling with their mortgage payment amounts are set to get a spring break from the Department of Housing and Urban Development (HUD). Recently the department released the news that they will issue $1 billion in mortgage assistance to displaced workers determined to keep their homes (HousingWire.com).

Emergency Homeowners' Loan Program Details

The creation of the Emergency Homeowners' Loan Program (EHLP) was prompted by the action of 60 national consumer advocacy groups. The powerful agencies rallied together and challenged HUD to create a program specifically targeting unemployed homeowners and was officially launched by President Barack Obama as part of the Dodd–Frank Wall Street Reform and Consumer Protection Act on July 21, 2010.

EHLP has been created to help unemployed citizens who are overdue on their mortgages and have missed one or more of their payments. The program is specifically catering to individuals in regions not covered by the hardest hit fund. Homeowners in Puerto Rico and 32 states will be able to borrow up to $50,000 to assist in paying off taxes, insurance payments and monthly payments. The loan will be interest free and will provide a safety net for up to 24 months and the funds can be applied to 100 percent of eligible arrearages.

EHLP Eligibility Qualifications

To qualify for the EHLP programs, borrowers must meet qualifications including:

• Individuals must be able to prove they have lost their jobs or show proof that they suffer from a medical condition that is prohibiting them from working.
• Only homes proven to be primary residences on the verge of foreclosure will qualify.
• Households with a yearly income above 120 percent of the area's median income will not be able to qualify for ELHP.
• Individuals must be able to prove that household income has dropped by at least 15 percent over the past couple of years.
• Those who do qualify for EHLP will be required to make contributions to paying off their debt, but that amount will be capped at 31 percent of their gross monthly income at the time of application in amounts no less than $25. ELPH funds will be applied to the remaining debt.
• EHLP assistance will be provided for a maximum of 24 months or up to $50,000 (depending on which comes first).
• Upon accepting the assistance, a borrower agrees to pay back the debt. That will occur when income levels are restored to 85 percent of the former earnings.
• Although HUD will issue a lien for the full loan amount, payments are not due during the 5-year loan terms as long as their monthly mortgage obligations are met on time and in full.
• For EHLP participants who meet the above term, the balance due will be reduced by 20 percent on an annual basis until the loan terms are fully met.
• This program will be made available to residents of Alaska, Arkansas, Colorado, Connecticut, Delaware, Hawaii, Idaho, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, Pennsylvania, Puerto Rico, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

Additional Home Owner's Assistance for the Unemployed

The exact spring roll-out date for EHLP has yet to be nailed down and until that time unemployed homeowners may qualify to get government assistance in the form of the existing Home Affordable Unemployment Program (HAUP). HAUP provides borrowers with the opportunity to reduce mortgage payment amounts or temporary mortgage forbearance for three months or more (pending lender approval). Qualifications for this program include:

• First-lien mortgages must have been contracted before Jan. 1, 2009.
• The existing home loan debt is capped at $729,750.
• The mortgage in question has to be in default or on the verge of that status.
• Home Affordable Modification Program (HAMP) participants do not qualify for HAUP.
• Only applies to properties with 1 to 4 units.
• Program only valid for primary residences.
• Participants must be unemployed.