HUD, in partnership with NeighborWorks America, announced on June 20 the launch of a federal program to assist homeowners at risk of foreclosure due to unemployment, underemployment, or a medical condition.
The Emergency Homeowners’ Loan Program (EHLP) will provide interest-free loans of up to $50,000 for the monthly mortgage payments of qualified and approved homeowners. HUD estimates that the program will “aid up to 30,000 distressed borrowers, with an average loan of approximately $35,000.”
HUD has approved 27 states and Puerto Rico for participation in the $1 billion program. Funds are intended to augment existing federal efforts such as the Department of the Treasury’s Hardest Hit Fund, which made available $7.6 billion to the District of Columbia and the 18 states deemed most impacted by the foreclosure crisis. Five additional states—Connecticut, Delaware, Idaho, Maryland, and Pennsylvania—have pre-existing state-level programs similar to EHLP. These states were approved in April to directly administer EHLP funds.
The 2010 Dodd-Frank Wall Street Reform Act authorized EHLP. The program has faced opposition from Republicans in Congress. On March 12, the House of Representatives passed legislation that would terminate the program (see Memo, 3/11). However, the Senate did not consider the measure and EHLP remains intact.
Dodd-Frank also requires the funds be spent by September 30, 2011. With the program guidance just now completed, the timeline for the program is very condensed. To be considered for assistance, homeowners must apply to the program by July 22 and the government is required to make application approval decisions by September 30. Advocates are concerned that the short timeframe may limit the government’s ability to enroll at-risk homeowners, and may result in unspent funds.
Information about EHLP and its eligibility requirements are available at http://www.FindEHLP.org or at 1-855-FIND-EHLP (1-855-346-3345).