For homeowners experiencing difficulty in making their monthly mortgage payments as required by their creditor, there are government programs at the state and federal levels that help homeowners avoid closure by providing them with grant money. This money is availed to the local organizations that then get in touch with the debtors and work out a way to help them avoid the impending foreclosure.
The debtor needs to be totally unable to make the payments to qualify for the grants and this can be in the form of receiving a foreclosure notice, abrupt and immediate loss of a job, being behind in the payments of the mortgage and owing more than the actual value of the stated property on the mortgage.
The assistance to prevent foreclosure comes in different forms such as:
- Counselling the debtors on their financial situation
- Provision of cash to the debtor to enable them to relocate
- Intervention on their behalf to help in negotiating the mortgage terms with the lender to lower the monthly payments.
There are several types of grants available for debtors. These include:
HAMP Incentive Grants
HAMP stands for the Federal Home Affordable Mortgage program and it encourages creditors to modify their loans by reducing the monthly payments so as to help those debtors struggling to repay their mortgage and keep their homes. The program gives debtors incentive grants of up to $1000 annually which help the homeowners increase equity on their property.
Federal Housing Counselling Grants
Homeowners with a high risk of foreclosure are provided with free counselling advice on their situation and the available options for them by the Housing and Urban Development Department. This department provides the debtors with certified counsellors who guide them through the process of foreclosure and help them deal with the difficulties that come with the complicated process. The program also offers counselling to the renters and financial literacy training programs to individuals to enable them avoid future foreclosures and manage their finances in a better way.
Foreclosure Alternative Relocation Grants
Borrowers who decide to enrol in the Home Foreclosure Alternative Program are provided with $3000 by the Making Home Affordable program to cater for their relocation costs. Debtors opting for foreclosure alternatives can go for the deed-in-lieu option where the creditor will accept less than the remaining mortgage to avoid the expenses that come with a lengthy foreclosure.
NeighborWorks Grants
This is a non-profit organization that operates nationally and has local networks in different states. It was created by Congress and its purpose is to provide the much-needed financial aid to community-based projects and offer technical assistance where necessary. They provide the debtors with grants to enable them to afford legal aid and counselling.
Benefits of Government Foreclosure Grants
- The borrowers receive direct financial assistance in the payment of their mortgage loan to help them save their homes.
- The debtor can negotiate the terms of their loan and start making reduced monthly payments to the creditor.
- The debtor is allowed more time by their lender to pay off their debts after an intervention
Foreclosure grants are of great help and importance for those debtors whose homes are facing foreclosures. It gives them options to help save their home or deal with the effects of losing their home.
Sources
www.homeguides.sfagte.com/foreclosure-prevention-grants-7530.html