On Dec. 10, the state of Oregon will be launching a massive, $100,000,000 initiative to help unemployed and underemployed homeowners at risk of losing their home.
Despite the enormous price tag – courtesy of the U.S. Department of the Treasury – the Oregon Housing Stabilization Initiative will only cover 5,000 eligible homeowners. Lisa Joyce, communication manager for Oregon Housing and Community Services, says there are thousands more eligible homeowners they will be unable to assist.
"We know there are many more homeowners who need help," she said.
Eligible homeowners will have a month to submit their application through the initiative's website. So the process is fair, all eligible applicants who submit their application by the deadline will be entered in a drawing for assistance. The winners will receive up to $20,000 in mortgage payment assistance for one year, whichever comes first.
Joyce says the agency isn't in the business of deciding which family's need is greater than any others. By establishing guidelines relating to income loss, income, liquid assets, and other criteria, she says they can more fairly administer limited funds.
In the office, she's heard many sad stories from homeowners trying to stay in their homes. One woman is struggling to recover from cancer, which cost her her job and her ability to make mortgage payments. The number of construction workers who can't find work is too large to count.
"Their self-worth is being eroded daily," she says.
The assistance provided by the initiative is technically classified as a loan, although the government will be forgiving the balance after five years. In other words, unless a homeowner refinances or sells the property for a profit, the mortgage payment assistance is being treated like a grant – without the tax implications, says Joyce.
"It's here to help people, not be a slush fund," she said.
Joyce says the agency hopes that these loans will prevent foreclosure and that even more troubled homeowners will receive assistance with any leftover money from the fund. Because eligibility for the program is established monthly, some participants may end up finding a job and no longer needing help.
That's when the agency's other programs may help. Set to be launched in the early part of 2011, Oregon Housing and Community Service will be starting programs designed to help people move who are living in unaffordable homes; provide assistance for fees and fines for people who have regained employment and are recovering from missed payments; and loan modification assistant program to help move a loan into a lower interest rate.
To sign up for the mortgage assistance program, visit www.oregonhomeownerhelp.org. The application is available starting on Dec. 10. If you or someone you know who may be eligible doesn't have access to a computer, Hacienda CDC will be opening a temporary office at Portland's Double Tree Hotel with free online application access.
Qualifications for the mortgage assistance program:
The household's income cannot be equal to or more than 120 percent of state median income. A homeowner who has an Oregon bond loan meets this test. For details, see the State Median Income Table.
The homeowner's current firt mortgage must date before January 1, 2009.
The homeowner must be unemployed or have a verifiable loss in income of 25 percent or more.
The homeowner cannot have more than four months of mortgage payments available as liquid assets. (Retirement and education savings accounts are OK).
The homeowner must complete and sign a Financial Hardship Affidavit.
The homeowner, in connection with a mortgage or real estate transaction, cannot have been convicted, within the last 10 years, of any one of the following: (A) felony larceny, theft, fraud or forgery, (B) money laundering or (C) tax evasion.
The subject property must be an owner-occupied, primary residence and be located in Oregon. Manufactured homes are eligible only if the structure is recorded in the county's deed records. *Note: Condominiums and Town homes are NOT considered single-family, 1-unit, detached homes.
The homeowner's unpaid mortgage balance cannot exceed $729,750.
Homeowners who have received notification of trustee/sheriff sale before February 1, 2011 are ineligible for the MPA program.
Homeowners who own other residential real property are ineligible for the MPA program.
Homeowners who are currently in active bankruptcy are ineligible for the MPA program.
Any homeowner who knowingly submits more than one application for the MPA program is ineligible.