HUD Emergency Homeowners’ Loan Program (EHLP): Home Loans for Those Facing Foreclosure

One of the most difficult things for many a homeowner during the recession following the recent financial crisis is that through job loss, or through underemployment, foreclosure might be imminent. In order to help those who are in danger of foreclosure due to income loss, the government is offering the Emergency Homeowners’ Loan Program (EHLP). This program is limited, though.  You only have until July 22 to get your preliminary application in, so you need to act fast!

Who Qualifies for HUD Emergency Homeowners’ Loan Program (EHLP)?


First, it is important to note that not everyone qualifies for EHLP.  You have to be in danger of foreclosure — usually that means at least three months behind on your mortgage payment.  You also have to have suffered an income loss of at least 15% due to losing your job, or having your hours cut.  Income limits are also part of the requirements.  You can submit your preliminary application, and, if you pass, you will be on the list to get funding.

You should realize, though, that once your application makes it through preliminary screening, you will have only five days to gather documentation to support your application.  You need to show that you meet the requirements.  NeighborWorks America is doing a lot of the screening, and you can get a list of supporting documentation from that site.  Because there is only $1 billion available, a lottery system is likely to be used to determine who gets the chance to participate.  Submit your preliminary application now, and start gathering your paperwork so it is ready if you are contacted.

Model house

ELHP may be able to help if you face foreclosure.

Participation is limited to states that aren’t already being helped by the Treasury’s Hardest Hit Fund and by generous state programs that are designed to help.  Residents of the following states (and one territory) are eligible for EHLP: Alaska, Arkansas, Colorado, Connecticut, Hawaii, Idaho, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, Pennsylvania, Puerto Rico, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

What Does the Program Do?

The Dodd-Frank Wall Street Reform and Consumer Protection Act provided $1 billion in funds to create ELHP.  The point of EHLP is to provide support for those who want to remain in their homes.  The program provides a special loan of up to $50,000 to help you make your monthly mortgage payment, homeowners insurance premiums, and property taxes. This zero-interest loan will also help you with what you owe in arrears.  The mortgage subsidy will limit your monthly payment to $150 or 31% of your income, whichever is greater, and the government will cover the rest, for up to 24 months.

Homeowners are expected to start repaying the loan as their means increase.  However, if it takes a long time to make it work, there is some help as well.  As long as the borrower continues to meet the qualification requirements for EHLP, there are no payments due on the government loan.  Over the course of the five-year term, the balance is forgiven — to the tune of 20% each year.  So the balance is reduced over time.  If you don’t get back on your feet within five years, you don’t have to repay any of the loan.

Approved counseling agencies will also help those who are unlikely to benefit from the loan program, since part of the program is to favor homeowners who have a chance of remaining current on their mortgages even after the assistance is over.

What do you think of HUD Emergency Homeowners’ Loan Program (EHLP)?  Will it help?

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Published or updated April 6, 2013.

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