How to get free Financial help for the mortgage – Homeownership is a great source of self-accomplishment and pride but can also be a tremendous responsibility. Apart from taking care of the roofing and plumbing issues and paying property taxes you also need to be concerned about making monthly mortgage payments. In a sluggish economy, it is easy to owe more on your property than its value or stay behind on mortgage payments. Fortunately, there are a lot of state, federal and private mortgage financial assistance programs. These programs help in saving their credit score and relieve the financial burden and stress of owning a real estate property.
Highlights of this Post
What Are The Different Types Of Mortgage Assistance Available To Home Buyers?
There are different forms of mortgage assistance programs available to home buyers who are navigating financial hardship. Before learning about the mortgage assistance program let’s take a look at the various forms of mortgage assistance programs that you can avail.
Modify Or Refinance
A common type of mortgage assistance program for home buyers who are struggling with mortgage payments is loan modification.
You can permanently change your mortgage by lowering the monthly payment amount, extending the number of years you have to pay off the loan, lowering the total amount of the home loan or getting a favorable interest rate on your home loan.
You can also get favorable loan terms by modifying or refinancing your mortgage. In other words, you are using a new loan to pay off the existing one.
Financial Assistance Program
Another form of mortgage assistance available to home buyers is direct financial assistance backed by nonprofit organizations or governments.
They help to reduce the burden of property purchase by giving affordable interest-free loans, grants, second mortgages or equity loans or by waiving certain charges or fees.
Foreclosure Postponement And Mediation Program
State programs and laws offer postponement or slow down processes to avoid foreclosure. The mediation programs and foreclosure postponement encourage borrowers and lenders to work together and implement a plan that can work for both parties.
Loan Forbearance
Your loan officer or lending company can give you a short break if you are trying to avoid foreclosure. Loan forbearance programs provide suspension or temporary reduction of monthly payments known as forbearance. Once the forbearance is over the mortgage lender will provide you with an affordable payment plan to repay the missed amounts.
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What Are The Eligibility Criteria To Qualify For A Mortgage Assistance Program?
If you’re struggling to make your mortgage payments or falling behind then you need to work with your mortgage provider to reduce the interest rate, develop a comprehensive and better repayment plan or waive certain fees included in the purchase price for instance closing cost assistance.
Apart from the federal program a lot of state and local governments offer mortgage assistance programs to local homeowners in the following ways.
- Mediation services
- Refinancing
- Financial aid
- Loan counseling
- Foreclosure postponement
- Free legal counseling
The eligibility criteria for mortgage assistance programs are flexible and are based on the following factors
- If you are a first-time home buyer or not
- How far behind you are on your mortgage payments?
- Whether your household income lies within the low-income limits of the program
- The type of loan that you have taken out and whether it is from an approved lender for instance FHA, VA, USDA
- Whether you are a veteran community service member or unemployed
- Whether your financial situation is permanent or temporary
- The home should be located in a specific city or county
- You must live in the home for a certain number of years for instance 3 to 10 years.
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What Are The Government Financial Assistance Programs That Help With Mortgages?
The Rational Modification Initiative
It is made possible through a partnership between Freddie Mac and Fannie Mae, as well as the Federal Housing Finance Agency (FHFA). Homeowners can benefit from this simplified loan modification program by obtaining a lower interest rate or an extension to their payments. Income proof is not required to participate.
Making Home Affordable Program
Several banks and lenders participated in the Making Home Affordable program, which was launched by the federal government. This program aims to make sure that banks and credit unions provide homeowners with loan modifications that make repayment easier. In some cases, a government subsidy may reduce interest rates as well as fees in some cases.
Hope for Homeowners
Hope for Homeowners is a government program offered through the FHA (Federal Housing Administration). Many low-income homeowners are helped by this program to refinance or pay off their mortgages (including subprime mortgages).
Military Homeowners Assistance Program (HAP)
Veterans, active-duty military, and their families are provided assistance through the Military Homeowners Assistance Program (HAP). Veteran and service member mortgage solutions are also offered by national banks and lenders like Chase and Bank of America.
Veteran Mortgage Relief Option
The US Department of Veterans Affairs assists eligible veterans, service members and their surviving spouses with home loans and financial assistance programs for mortgages. You need to fulfill the eligibility criteria to access housing grants and home loans including those for Native American veterans and vets with disabilities.
The department provides mortgage assistance and other housing-associated programs so that veterans can buy, build, repair, retain and adopt a home as per their capability. VA home loans for instance are provided by private lenders like mortgage companies and banks.
The best thing about VA home loans is that they do not require credit score requirements or a down payment. Apart from taking help from a VA loan, you can also use a Streamline Refinance Loan to lower your mortgage interest rate and payment.
Federal Housing Administration
The FHA home loan program managed by the Federal Housing Administration assists home buyers by ensuring their loans. The loans are backed by the government so that lenders can provide them to low-income home buyers at lower down payment and closing costs.
FHA assists seniors, mobile home buyers and first-time home buyers to reduce their financial burden. You can visit the Housing and Urban Development website to locate FHA-approved lenders and apply for the program. Generally, the credit score requirements should not be high and the home should be within the FHA loan limits depending on your location.
U.S. Department Of Agriculture
Similar to the VA the US Department of Agriculture or USDA guarantees mortgages for eligible low-income homeowners in rural America. USDA programs are in line with the 2021 Cares Act and have been designed to assist homeowners in coping with the economic impacts of the pandemic.
Homeowners who are behind on their mortgage payments can apply for 180-day forbearance as well a 180-day extension is required.
State Housing Counseling Agencies
HUD-approved housing counselors are available in every state that provides some sort of mortgage assistance program for homeowners who are dwelling in their community. Councilors know about nonprofit agencies and local governments that provide financial relief programs for eligible candidates.
HUD-approved housing agencies provide foreclosure prevention counseling and assistance for free. You can search for information and referrals about housing counseling agencies by searching the database of the Consumer Financial Protection Bureau.
HUD Home Equity Conversion Mortgage
Homeowners who are unable to qualify for mortgage grants through other resources can apply for financial support from the US Department of Housing and Urban Development and get help in the form of a reverse mortgage program. Individuals need to have a small balance left on their mortgage to qualify for this program. For more assistance, you can contact 1-800-225-5342.
Mortgage Relief Options From Fannie Mae And Freddie Mac
Homeowners with conforming loans that are backed by Freddie Mac or Fannie Mae have mortgage relief options. Individuals who are going through a temporary hardship can take the help of Fannie Mae Refi and Freddie Mac refi possible programs that are designed for low-income homeowners.
The refinance program comes with unique benefits that provide financial relief for financially challenged homeowners including easier debt-to-income qualification, low closing cost with no appraisal fee and low mortgage rate and monthly payment. Availability of these loan options can provide big savings for homeowners.
Home Affordable Modification Program
The US Department Of Treasury has created the Home Affordable Modification program to assist needy homeowners by eliminating foreclosure. The program is a part of the Making Home Affordable initiative and has been launched to mitigate the mortgage crisis among low-income homeowners.
The program provides financial support to mortgage lenders so that they can make modifications to home loans and enable homeowners to pay their mortgages on time. If you’re struggling to make your mortgage payment and want to avoid the risk of foreclosure then you can contact your mortgage provider and learn how to qualify for this program.
Homeowners who are participating must be current on their mortgage payments for a minimum of three months before the modifications begin. Homeowners are also required to meet their income and other eligibility criteria.
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Mortgage financial assistance from banks and lenders
Associated Bank
The unemployed can stay in their homes with assistance from Associated Bank’s mortgage assistance program. How does that work? Making monthly payments up to 12 months at a time. In addition, you are able to suspend your payments or reduce your monthly interest rates with this tool. Please call Associated Bank at 800-236-8866 if you would like more information.
Bank of America
There is a program called Foreclosure Prevention at Bank of America. The Bank of America offers multiple programs to help homeowners avoid foreclosure, including modifications, principal reductions, short sales, interest rate rebates, and other additional resources. A number of help centers have been opened by the famous lender in many of the major cities in the country.
Citi Group
Millions of homeowners receive mortgage assistance from Citigroup. Taking action to stop foreclosures and help homeowners stay in their homes is a priority for the bank. Amounts of money will be awarded to qualifying borrowers in the form of fee reductions and principal reductions.
It is important that you know that you can also qualify for additional mortgage assistance if you are unemployed or if your income has dropped. Contact Citi Homeowner Assistance Program for more information
J.P. Morgan Chase/Washington Mutual
More than one million homeowners in the United States will receive assistance through a $70 billion plan released by Washington Mutual and JP Morgan Chase. It is impossible to count on the delinquent borrowers’ service program they already have in place. Learn more about mortgage lending services here. JP Morgan Chase provides dozens of financial assistance programs and tools to assist borrowers in paying their mortgages.
Marshall & Ilsley
A foreclosure stay is available from Marshall & Ilsley (M&I) in order to give homeowners time to improve their financial situation and raise their credit scores. You can also visit one of the bank’s branches to find out more.
Regions Bank
Through the Customer Assistance Program of Regions Bank, thousands of homeowners have avoided foreclosure. Qualifying applicants can take advantage of several solutions offered by the program. Mortgage loan modifications, forbearances, and payment plans are all offered by this organization.
Wachovia / Golden West / Wells Fargo
Wachovia, Golden West and Wells Fargo have teamed up to help millions of homeowners refinance their home loans and pay off their mortgages . They believe that many people have been victims of deceptive practices by lenders. If you have a mortgage loan whose first payments are only used to pay off interest or an ARM (Adjustable-Rate Mortgage) that has changed its rate to a higher rate, this help program could be very useful for you.
Wells Fargo
Two great options are available for homeowners through the Wells Fargo Loan Modification Program. Fast-Trac for adjustable-rate mortgages, which delays the foreclosure process, and Project Lifeline . Thousands of homeowners have benefited from Wells Fargo’s two programs since they launched.
Bank of America
A program launched by Countrywide and Bank of America aims to help 400,000 homeowners stay in their homes by making mortgage payments. You can also receive financial assistance if you are moving your family to a new, more affordable home. The money from the settlement will be used directly to pay homeowners’ mortgages.
Nonprofit Organizations And Charities That Help With Mortgage Payments
A lot of charities and nonprofit organizations assist low-income homeowners with mortgage payments if they are navigating financial hardship and in need of assistance to avoid foreclosure. Here are a few charities and nonprofits that you can consider in times of your need.
Alliance for Stabilizing our Communities
Among the services offered at the Alliance for Stabilizing our Communities are mortgage advice and foreclosure prevention techniques. This organization was formed through the merger of the National Urban League (NUL), the National Coalition of Asian Pacific American Community Development, and the National Council of La Raza.
Catholic Charities
As part of its foreclosure prevention services, Catholic Charities also offers free counseling. There are offices throughout the country. Specialists in the area of housing and mortgages address topics such as mortgage delinquency and its effects.
Community agencies
There are many services and resources available through community action agencies for struggling homeowners. Although many of the agencies specialize in giving professional advice and technical assistance, some also provide cash grants, mediation services, and other tools to assist families in avoiding foreclosure.
NID-Housing Counseling Agency (NID-HCA)
NID-Housing Counseling Agency (NID-HCA) is a non-profit counseling organization approved by HUD that assists homeowners with various financial situations, including foreclosure and mortgage defaults, predatory lending, credit repair, referrals, and execution advice.
Neighborhood Assistance Corporation of America
There are more than 40 Neighborhood Assistance Centers of America located across the country. Those in need of assistance can apply for mortgage assistance through the association.
Save the Dream Tour
A mortgage modification is arranged by Save the Dream Tour. These companies have offices in the major cities of the United States.
In order to achieve its goals, Save the Dream Tour has forged alliances with several banks and lenders, whose representatives are frequently present at its meetings.
Union Plus
In addition to providing mortgage assistance, Union Plus exclusively assists members of unions and labor organizations. The program is also open to immediate family members of union members. Depending on the program, beneficiaries may even receive a cash payment or a subsidy to help them pay off their mortgage.
The United Way
The United Way has local chapters throughout the United States of America that provide suggestions, advice and emergency financial assistance to low-income families and individuals. Homeowners who are behind on their mortgage payments and in need of a financial assistance program can reach the hotline of the agency by dialing 211.
NeighborWorks America
NeighborWorks America is a group that assists families and individuals who are unable to pay their mortgage on time and in need of assistance to avoid foreclosure. You can contact the nonprofit by dialing 202-760-4000 or visiting its official website to talk to the specialist in councilors and see if you can qualify for assistance.
The Salvation Army has a rich history of providing much-needed financial aid to the less fortunate and underserved communities. The charity provides emergency rent and utility as well as a mortgage assistance program to families in need.
Homeowners need to show they are facing foreclosure notice from their mortgage lender and demonstrate they are financially capable of resuming their mortgage after the crisis passes.
National Homebuyers Fund Inc.
The nonprofit public benefit corporation that sponsors home buyers up to 5% of the purchase price of the property is known as the National Homebuyers Fund Inc. One of the significant challenges associated with a mortgage loan is paying closing costs and down payment.
To bridge the gap the National Housing Fund provides closing costs and down payment assistance up to 5% of the mortgage loan amount.
St. Vincent de Paul
St. Vincent de Paul is a ministry in a few Catholic churches throughout the United States of America. The charity offers emergency assistance and financial support to families who are coping with crises. They can help you with mortgage aid, transportation assistance and employment.
Conclusion
Many people dream of purchasing a property that they can call home. But a lot of times homeowners face financial hardship and fall back on their mortgage payments. Fortunately, there are a lot of financial assistance programs that help homeowners with mortgage relief options and address the problem of housing instability or foreclosure in the United States. Mortgage grants come in several forms such as grants, loans, down payment closing cost assistance and so on. It is important to fulfill the eligibility criteria to receive assistance through the aforementioned programs.
Visit Get Government Grants for government and private assistance programs that can provide you with financial support. Check out our article on Section 8 Housing Choice Voucher Homeownership Program.
Frequently Asked Questions
Is There Any Mortgage Relief Program For Homeowners Who Are Financially Struggling?
The Homeowner Assistance Fund is still assisting eligible low-income homeowners who need mortgage relief. The Homeowner Assistance Fund was designed under the American Rescue Plan and has assisted homeowners with more than $50 million to avoid housing instability and foreclosure in the society. You can talk to your mortgage provider to learn about how to qualify for homeowner assistance funds in your state.
Where to find Financial help for the mortgage?
Many companies, government agencies, non-profit organizations, counseling agencies for HUD, banks, and states sponsor these programs. Numerous organizations have pledged to provide mortgage relief – and loan modification in particular – to millions of Americans.
