Mortgage assistance in Rhode Island as part of Hardest Hit Fund

The federal government Hardest-Hit Fund (HHF) is granting Rhode Island tens of millions of dollars to help distressed homeowners pay for their mortgages and avert a foreclosure. The funds will be administered by various non-profits and housing counseling agencies across the state, and Rhode Island Housing Agency is also administering the program.

The money that is part of the Hardest Hit Fund will be used for preventing avoidable foreclosures. Rhode Island homeowners who can’t make their mortgage payments as the result of a reduction in income due to a hardship or emergency, such as a job loss, medical emergency, or unemployment, can benefit from this mortgage assistance program. The funds being provided are also intended to complement existing federal government, state of Rhode Island, and bank and lender mortgage programs. Also note that the program will only be available to owner-occupied homeowners who have exhausted all other options in trying to solve their housing situation.

Mortgage assistance plans as part of Rhode Island Hardest Hit Fund

Homeowners will have four different options and programs that they may be eligible for as part of the Rhode Island hardest hit program.

Mortgage and Loan Modifications Assistance for Non-HAMP Customers (LMA-Non-HAMP) - This is one component that focuses on those local and regional banks and lenders who do not participate in the federal government funded HAMP program. Many of the customers of these smaller regional and local lenders are also struggling to meet mortgage payments and may be facing a foreclosure. The LMA-Non-HAMP program will provide up to $6,000 to assist the borrower and lender to achieve a workout or loan modification. 



Mortgage assistance will be provided under this plan and it will be made to the banks and lenders to further modify the loan to reduce the payment to a level that is 35% or 31% housing debt to income ratio based on the borrower’s current total household income. In addition to this payment, up to $30,000 in total additional assistance may be available for targeted homeowners in Rhode Island who are at risk of facing a foreclosure filing through the TIHA program.

Loan Modification Assistance for HAMP Customers (LMA-HAMP) - This plan, which is known as the LMA-HAMP program, will help homeowners qualify for a government HAMP modification. The component will provide up to $6,000 in mortgage assistance to allow the homeowner to qualify for a federal government HAMP modification. There are some conditions, and they include that the lender (i) can document that it has made contributions to the process having a value of at least an equal amount, (ii) the homeowner/borrower needs to contribute at least 20% of the advanced amount and (iii) the HAMP modification agreement needs to be for a minimum 5-year term and it is signed by the borrower and lender. The contribution made by the lender may be in the form of an extension of the mortgage term, an interest rate reduction, or principal forbearance, write off or forgiveness. In addition to the $6,000 in funding that is permitted under the LMA-HAMP program, an additional $2,500 in financial assistance may be available under the Temporary and Immediate Homeowner Assistance program for special circumstances that may be faced by Rhode Island homeowners. Learn more on forbearance mortgage programs.

The Rhode Island Hardest Hit Fund also provides assistance from the Temporary and Immediate Homeowner Assistance (TIHA) - Unfortunately there are many situations where payments made by or on behalf of the borrower toward the first home loan are not sufficient to prevent an avoidable foreclosure on the homeowners part. These situation include, but are not limited to, situations where a borrower has had a temporary loss of income (from unemployment, reduction in work hours, or a medical crisis) or maybe the borrower had an increase in expenses that have created a mortgage delinquency that is resulting in the homeowner facing a foreclosure. The maximum amount of financial assistance provided under the TIHA component is $6,000 per household, but is limited to $2,500 when the maximum assistance has been provided under LMA-HAMP or LMA Non-HAMP modifications a syndicated above. The maximum combined mortgage assistance permitted under the TIHA program is $8,500 per household and may be made on either a lump sum or monthly basis.




For those homes that just can’t be saved, the Moving Forward Assistance (MFA) option may be best for them. This component of the Rhode Island hardest hit fund program is designed to provide eligible homeowners with financial assistance in order to facilitate a deed-in-lieu of foreclosure or short sale of their home when it is determined, after reviewing all options, that they can no longer afford to stay in their home. It can be used only when other federal government programs are not available to them. The total amount of financial assistance under this MFA program will be limited to $4,000 per family which will be made up of a maximum of $1,500 to facilitate a short sale or deed in lieu of foreclosure and $2,500 to assist the homeowner with relocation and paying for moving costs.

Learn more about Rhode Island Hardest Hit Fund

To apply or get more information about the program, talk to your mortgage lender, a housing counseling agency, or contact Rhode Island Housing at 800 427-5560.

In addition, click here to learn how mediators in Providence Rhode Island can also help, and answer questions.




By Jon McNamara

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