Up to $30,000 is available for struggling Michigan homeowners
Step Forward Michigan assistance still available through Help for the Hardest Hit funds.
June 3, 2014 - Author: Brenda Long, Brenda Long, Michigan State University Extension
Step Forward Michigan has provided assistance to eligible struggling homeowners with their mortgage and property tax payments to $30,000 since 2010. This program has already helped thousands of Michigan homeowners statewide with qualifying involuntary hardships to afford to keep their homes. More funds are available and are expected to run out in about a year.
Qualifying involuntary hardships include unemployment, underemployment, medical conditions, divorce and death. Eligible property type includes 1-4 unit owner-occupied residences.
If approved, up to $30,000 is paid directly to the participating mortgage servicer or county treasurer for application directly to the household’s mortgage loan or property taxes. No interest and no payments are required from the homeowner. A subordinate (2nd) lien is placed on the property for five years and 20 percent of the loan is forgiven per year. At the end of the five years, the loan is forgiven. During the five year period, if the property is transferred, sold, or is no longer the principal residence, the non-forgivable portion is due.
“This is a wonderful program. Most of our housing clients are receiving Step Forward funds in recent months and several have received $30,000”, said Jim Buxton, Housing Counselor with Ionia Michigan State University Extension. “It enables them to keep their homes instead of going through foreclosure. We help them fill out the application, submit all the required documents, and follow-up until a decision is made. Once they get their payments caught up, they can also apply for a loan modification with their lender.”
A summary of each program are highlighted below:
Unemployment Mortgage Subsidy program
- Mortgage payment subsidy for a full 12 months
- Equal to 50 percent of the validated mortgage payment up to $1,000 per month
- Maximum assistance of $30,000 which can include monthly subsidy and funds toward delinquencies
- Must be receiving Michigan Unemployment Benefits to qualify
Loan Rescue assistance up to $30,000
- Homeowner must be able to sustain future payments. Housing related expenses must be at or under 45 percent of the gross (before taxes) monthly income.
- Help with catching up on delinquent property taxes as well as mortgage payments.
- Targeting under-employed homeowners.
- Mortgage payment must exceed 45 percent of gross household income.
- Homeowner has a qualifying involuntary hardship.
- Assistance up to $30,000 to cure delinquency and other associated costs.
- Servicer must modify the loan terms.
- Available on second mortgages if first mortgage is current.
Principal Curtailment Program
- Property must have negative equity
- Up to $20,000 assistance with $10,000 from the lender and $10,000 from Step Forward Michigan
- Lender/Servicer must approve
Homeowners who already received Hardest-Hit® assistance cannot re-apply; however, clients that previously applied and were ineligible because they were outside of program parameters may reopen their application.
Go to www.StepForwardMichigan.org to start an application or contact your local MSU Extension office with a housing counselor. In other areas, find a housing counselor at http://www.mshda.info/counseling_search/