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Home Mortgage Grants

Home mortgage grants present a fantastic opportunity for borrowers to reduce their costs of living in the home of their dreams. Additionally, home mortgage grants serve as a social safety net to limit the possibility of foreclosure, a failed mortgage, and concerning personal debt loads. We’ll identify the main grants available for those with home mortgages, and how each grant may help their particular situation.

Do keep in mind that grants are free money that does not need to be repaid. Usually dedicated to a specific cause and allocated by federal, state, and local governments and agencies, a home mortgage grant is literally free money for the purposes of paying for a mortgage or maintaining a home. Free money does not come without strings, however, so expect to spend some time to make phone calls, fill out a grant request, and weed through the many grants available.

Emergency Homeowner Loan Program
One of the biggest programs available to people in economic hardship is the EHLP program, or Emergency Homeowner Loan Program. While the program is a loan, clauses in the program allow borrowers to never repay their loan, thus making it free money.

Through the EHLP, borrowers who are currently unemployed, underemployed, or facing a cut in their take home pay can file with the US Federal Government to have their mortgage payment temporarily set to 31% of their monthly income or $150, whichever is greater. During this time, the Federal Government will pay the difference between the amount you pay and your current mortgage payment, thus creating a new, no interest loan for the mortgage holder.

This program is in effect for as many as 24 months. Throughout this 24 month period, a homeowner’s loan balance will build to the Federal Government. The benefits are capped at 2 years, and no homeowner may borrow more than $50,000 to make no more than 2 years of mortgage payments. Once the 24 month or $50,000 limit is reached, the full mortgage payment is then the responsibility of the homeowner once more. Each year that the homeowner makes their mortgage payments on time, the Federal Government reduces the loan by 20% each year. Thus, if you were to use $25,000 of the government’s money to pay your mortgage, your amount due would be reduced by $5,000 each year all the way to $0.

To qualify, you must have experienced a drop in hours, a cut in pay, or a loss of a job. Also, you must earn less than $75,000 per year.

Principal reduction alternative
The PRA program from the US Federal Government through the Departments of Housing and Urban Development (HUD) allows homeowners to reduce their total amount owed on their mortgages. In using a PRA program, your monthly payment will be slashed as the total amount owed on the loan is reduced in order for the value of the mortgage to be in line with the value of the loan. This program was intended to keep homeowners in their homes, while improving the level of homeownership and home values in local communities.

To qualify for PRA you must meet the following criteria:

  • Have a mortgage which is not owned by GSEs Fannie Mae or Freddie Mac. Other programs work with these two entities on special terms.
  • Have negative equity in your home–owe more on the home than the current market value
  • Pay more than 31% of your monthly income toward your mortgage payment
  • Owe $729,750 or less on your home.
  • Be able to demonstrate financial hardship and have well documented proof of income, and also proof of a declining income, in the case of hardship.
  • Have enough income to pay off a new, modified mortgage on your own accord.

Under the PRA program, borrowers will be able to reduce their home mortgage balances by several thousands of dollars. In the most bubbled areas, some homeowners are finding their principal reduced by half or more, thus saving them hundreds of thousands of dollars instantly, and even more over the life of the loan.

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