The federal government will be giving the state of Arizona over $120 million as part of the hardest hit fund. Thousands of families across the state are expected to be able to receive foreclosure and mortgage help. This funding will be used to help homeowners through a variety of means, such as paying for permanent mortgage modifications, providing advocacy through HUD counselors, paying the mortgage for the unemployed, settling second home loans, and offering temporary and short-term mortgage assistance and grants.
The money will mostly be used to help people who owe more money than their property is worth. To receive a principal reduction from the Arizona Department of Housing, the mortgage principal must be greater than 120% of the present market value of the home. The borrower can receive a $50,000 contribution from the bank or lender if they qualify. This contribution is to be used for principal reduction and will be matched by the bank or lender. The amount of money that the homeowner owes will be forgiven over a period of time.
Other components of the Arizona Hardest Hit Fund include subsidizing monthly mortgage payments for unemployed or underemployed borrowers, extinguishing second mortgages on borrowers homes, and providing housing counselors so that free foreclosure assistance and advice can be offered.
Principal reduction from Arizona Hardest Hit Fund
Arizona will be using over $90 million to help homeowners who owe more on their mortgage than their house is currently worth. This will either be in the form of reducing the principal balance or by forgiving a portion of the loan. Several thousand homeowners are expected to benefit from this part of the program. The main goal of the reductions is to help those who didn’t make risky decisions and who are struggling due to bad luck or timing on their home purchase. This program is not likely to be of much benefit to you if you have taken out a second mortgage, spent lavishly, and have high levels of debt. Arizona is also giving several million dollars to help people pay off a second mortgage, if the second home loan was taken out for a valid reason.
Unemployed mortgage assistance
The program also helps people who have lost their jobs or had a decrease in income due to something out of their control. This money will help people who are struggling to pay their mortgage because they are unemployed or facing a financial hardship. Even if someone works fewer hours, they may still qualify for residency. The borrower may be able to get help from the government to pay their mortgage for up to two years.
How do I apply
The Arizona Department of Housing has put together a set of standards and guidelines to help make sure that the agency only helps those homeowners who have shown they are responsible in their home buying decisions. This does not help those who live and spend money foolishly. Contact your bank or lender, or the Arizona Department of Housing, and inquire about eligibility for the Arizona Hardest Hit Fund.
A homeowner must be in danger of losing their home through foreclosure to be eligible for assistance. Other options and resources must have been pursued by the borrower as well The Arizona Hardest Hit Fund can only be used for loans on a borrower’s primary residence. Other requirements for getting a loan modification include having a financial hardship, like losing your job, having a medical condition, or going through a divorce.
If you qualify for the hardest hit fund, the money will go towards a homeowners permanent loan modification program. The guidelines will be similar to the federal government’s program that makes home affordable modifications. This means that more money will be used to pay off a second mortgage, as well as to help those who are unemployed or underemployed.