Federal Program to Help 1,400 Minnesotans Facing Foreclosure

[UPDATE: The application deadline for this program has been extended through Wednesday, July 27, 2011]

A new program offering money to catch up on delinquent loan payments is accepting applications in Minnesota. Qualified applicants should hurry, as the time frame for joining this program ends July 22.

The Emergency Homeowners' Loan Program will provide up to $50,000 in interest-free, forgivable loans to qualified borrowers. The national program is designed to bring selected homeowners current on their loans, and to assist with future mortgage payments over two years. The loan is forgivable for homeowners who stay in their homes five years beyond the program's two-year duration.

The loans are available to borrower(s) who:

• Had income declines of 15% or more due to unemployment, underemployment or illness.
• Have not made a mortgage payment in three months and who have received a foreclosure notice.
• Live in the mortgaged property.
• Meet income requirements: Applicants may make no more than $75,000, or 120% of area median income, whichever is greater. In the Twin Cities metro area, that's around $100,000 for a family of four.

Time is short for applying. Applications will only be taken through July 22. An extensive application must be filled out, and eligible participants will be selected via lottery.

Julie Gugin, director of the Minnesota Homeownership Center, which coordinates a network of foreclosure prevention counselors around the state, said two-thirds of homeowners who seek counseling are behind due to income or medical issues. "This program will offer an important lifeline to a large segment of homeowners who otherwise struggle to find options to stay in their homes," she said.

Minnesota is one of 32 states sharing a $1 billion pot to stem foreclosure. The state will receive $55.8 million for this program. It should reach 1,405 Minnesota home owners. Officials estimate the program will decrease the state's projected foreclosure homes this year by at least 5%.

Source: 1,400 Minnesotans facing foreclosure could be helped by new federal program
Source: Franken announces emergency loans for homeowners facing foreclosure