Government Assistance Coming For Struggling Homeowners

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Good news for homeowners who are finding it a little hard to cover their mortgage expenses. The federal government has extended their deadline for homeowners requiring emergency help until Sept. 15. The extension is good for homeowners in 27 states.

July 27 was the original deadline for the Department of Housing and Urban Development Emergency Homeowners Loan Program. This loan program was designed as part of the Durbin-Dodd amendment to give homeowners bridge loans to help them cover the expenses of their mortgages. In order to qualify, the consumer must have experienced a medical problem, job loss, severe credit card debt and be at least three months behind on their mortgage.

If a homeowner is eligible they can receive financial help for up to two years or $50,000. The best thing about the loan is that its interest free and it does not have to be repaid if the homeowner continues to make on time mortgage payments for the next five years.

The original July deadline was set up to make sure that the money would be available for distribution after Sept. 30. The deadline has been extended for a second time in order to assist more people. The program costs about $1 billion and is anticipated to help anywhere from 20,000 to 30,000 suffering homeowners. According to a housing department spokesman, Brian Sullivan, approximately 84,000 preliminary applications were sent in, and about 40,000 of them passed the first round of eligibility screenings.

In order for homeowners to move onto the next round of approval, they must provide thorough documentation of their financial circumstances and needs, such as bank statements or a letter of employment termination.

The loan program plans to help homeowners in states that are not eligible for the $7.6 billion fund that provides assistance to 18 states most afflicted by the housing crisis. The Emergency Homeowners Loan is available to homeowners in Alaska, Arkansas, Colorado, Hawaii, Iowa, Kansas, Louisiana, Maine, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

Other states have implemented programs to help homeowners who have fallen behind on their mortgage payments. Delaware, Idaho, Maryland, Connecticut and Pennsylvania have all set up programs. A total of 11,000 applications were received from those five states, and by the end of the August, 3,000 applications were approved.