The Hardest Hit Fund (HHF) was created by the federal government in 2010 to give financial aid to struggling homeowners in states that were most negatively impacted by the housing crisis and recession through loan modifications, mortgage payment assistance, and transition assistance programs. States were selected to receive funds from the program based on having above average rates of unemployment and decline in housing prices.
18 states and Washington, D.C. received a share of the $7.6 billion dollars allocated for the fund's programs and are responsible for setting their own standards for eligibility and distributing their share of the funds.
What Is The Hardest Hit Fund Good For?
According to the Treasury Department's website, the fund differs in each state, but generally provides the following benefits:
- Mortgage payment assistance for unemployed or underemployed homeowners
- Principal reduction to help homeowners get into more affordable mortgages
- Funding to eliminate homeowners’ second lien loans
- Help for homeowners who are transitioning out of their homes and into more affordable places of residence
Although each has different standards, there are similarities across states. For the sake of space, I'll look specifically at Florida's Hardest Hit Fund to get an understanding of how state funds generally work.
Florida Housing has two options through Hardest Hit Fund: the Unemployment Mortgage Assistance Program (UMAP) and the Mortgage Loan Reinstatement Program (MLRP). UMAP is intended for homeowners who are unemployed, underemployed, or have had their income reduced by at least 10% because of a financial hardship. Homeowners who receive UMAP assistance can use the funds to pay their mortgage, taxes, and insurance for up to 12 months, and are limited to $24,000.
Florida's Mortgage Loan Reinstatement Program (MLRP) is for “...homeowners who have experienced and recovered from a qualifying financial hardship, loan funds can be used as a one-time payment towards any past due amount: up to $25,000 will be paid. ”
Terms For The Assistance
Florida's UMAP and MLRP funds are given as an interest free, deferred-payment loan. 18 months after acceptance into the program 20% of the loan will be forgiven. The funds must be paid back if the home is sold before the end of the five year period if there are sufficient proceeds from the sale. If the home is not sold after five years, the loan is forgiven.
A homeowner must meet all the requirements for eligibility in the homeowner, property, and mortgage categories to receive HHF assistance. The following is a partial list of those eligibility requirements:
- Must be a legal resident of the United States and your state
- Mortgage and all fees associated with it must be greater than 31% of total household gross income
- Home must be homeowner's primary residence, and must not be condemned, abandoned, or vacated
- Principal loan balance must be $400,000 or less
- There cannot be pending litigation on the property or mortgage
- Borrower must have experienced a valid financial hardship
- Borrowers with sufficient cash or assets may be required to use those assets to pay mortgage before being eligible for assistance
- Homeowners must complete certification quarterly to prove that they are eligible to receive payments.
Documentation Required To Apply
Hardest Hit Fund eligibility is determined by need, so each homeowner has to submit documents to prove that they need the funds. Following is a partial list of the documents you will need to show after applying for HHF assistance:
- Proof of residency
- Copy of deed
- Mortgage statement
- Any correspondence from your servicer
- Bank statement
- Homeowners Association dues statement
- Tax statement
Beware Of Scams
As always when looking for help with something important, it's necessary to watch out for scams. Foreclosure seems to be especially prone to con artists claiming to help people apply for relief or keep their homes. The Florida HHF website states that anyone who needs help will be assigned an advisor who can help them throughout the process, and that there is no fee to apply or determine eligibility. So be cautious of anyone offering to help you get Hardest Hit Funds in exchange for payment. To apply for assistance from your state's Hardest Hit Fund, go to their website to begin your application online and use their advisors if you need help.
Applications for HHF won't be accepted after the end of 2017, and some states have stopped taking applications already. HHF can be a big help for the homeowners who get temporary assistance from the fund, but it's not available in most states, and where it is, time is limited. And, of course, not everyone is eligible. If you can't get assistance, don't give up on improving your mortgage situation. There's always hope.
If you're behind on your mortgage payments and are not eligible for HHF assistance, you should consider hiring an attorney to advise and represent you. No matter how desperate you may feel, you should know that others have probably been in the same or worse situation as you, and an experienced lawyer will know what options you should pursue to reach the best outcome. You may be able to modify your loan to make your monthly payment much more affordable. Even if you will not be able to keep your home, an experienced attorney can help you get as much time as possible in it, and put you in the best position to rebuild your life. Reputable law firms are affordable and well worth the expense.