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Federal Government Hardest Hit Fund
The Hardest Hit Fund is a mortgage assistance program that was created by the federal government to help homeowners in states that are experiencing high unemployment and/or those states that were hit hard by the nations economic and housing crisis. The program will be distributing billions of dollars in aid to qualified homeowners in the states that qualify.
The Hardest Hit Fund has continued to evolve and expand since it was established in February 2010. One of the most significant improvements is the increased focus on providing mortgage help to homeowners in states that have the highest rates of unemployment and job loss.
Each state has created their own way to use the funds from the federal government. Some state government will be providing homeowners with additional foreclosure mitigation services, some of the programs that states will be using the funds for will help those who are facing a medical emergency, the unemployed or underemployed people keep up with their mortgage payments. Others have decided to try to assist homeowners who are faced with upside down home loans (or negative equity) by reducing the principal of the mortgage loans that they owe or they may decide to use the funds to finance short sales of homes to avoid foreclosure.
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It is important to remember that the Hardest Hit Fund is targeted at those families and individuals who need mortgage help the most and who have a reasonable chance of getting back on track, and is not designed to prevent all foreclosures as some homes just can’t be saved. Some homeowners took at loans that they would have no chance of repaying, and this government program would not be of help to them.
Types of mortgage help from Hardest Hit Fund
Each state has their own method of providing relief. Some examples of what type of help a homeowner may be eligible for from the Hardest Hit Fund include either temporary or permanent loan modifications, a reduction in interest rate, lengthening the term of the home loan, a reduction in principal, or cash grants that can be used to pay the mortgage while the individual gets back on their feet. The program is now also providing additional assistance to people who have lost their jobs. Learn more on HUD emergency homeowner loans.
In almost all cases the applicant needs to prove some type of financial hardship, and they also need to show that if they are provided short term relief that they will be able to eventually resume making timely payments on their home loan.
Homeowners in the following states are eligible for mortgage assistance and foreclosure prevention help from the Hardest Hit Fund. The program is run at the state level, and each state’s Housing Finance Agency is administering and distributing payments from the Hardest Hit Fund.
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