For many homeowners, losing your home to a foreclosure can be one of the most horrifying thoughts keeping you up at night. Luckily, help is close at hand.
The recent global coronavirus pandemic has left many people feeling helpless after losing jobs and livelihoods. Many fear that the lack of income may lead to eviction from their hard-earned homes as well. However, we are here to tell you that there is more than one way to get help with your mortgage payments. You just need to know where to look.
Table of Contents
- 1 How Can I Get Help Paying My Mortgage?
- 2 What is Emergency Mortgage Assistance Program?
- 3 Does Catholic Charities Help With Mortgage?
- 4 Mortgage Payment Grants
- 5 Help With Mortgage Payments If Disabled
How Can I Get Help Paying My Mortgage?
According to a survey by the U.S Census Bureau conducted in July 2020, almost a quarter of Americans failed to pay the mortgage for June 2020 and had no clue how they will be able to make next month’s payment if they were able to do so at all. Many specialists feel that getting help on time can make things a lot easier for the borrower. Here is a step by step guide for you on how to get help paying your mortgage.
Step 1: Talk To Your Lender
Lenders want you to pay back the loan that you owe to them. They will try their best to help you find alternative ways to make payments. It serves their interests to find a loan amount that makes it possible for you to make your payments on time. Lenders may offer you solutions for your mortgage payment, like making temporary payment arrangements, lengthening the term of your mortgage, or switching to interest-only payments. This will hopefully bring down your monthly mortgage payment so that you are able to pay it off.
Step 2: Use Your Grace Period
Mortgage lenders allow up to two weeks in a grace period for late payments. If you make payments within the grace period, you will not be subject to fines and late fee penalties, though it will be considered a late payment. Make sure you use the grace period to arrange funds for the mortgage. Contact friends and family, reassess your monthly budget, or seek out short term loans.
Step 3: Reassess Your Budget
Do you really need that gym membership you never go to? Will it be better to unsubscribe from the monthly botanical magazine? Many times, we fail to look at our monthly expenses objectively. Reassessing and reevaluating your budget can free up the funds you need to pay your mortgage. Cut out any expense, small and big, that is not urgently needed and redirect all funds towards your mortgage payment. According to Sherry Smith, a senior housing counselor at Neighbourhood Housing Services (NHS) Chicago, the money is available 85 percent of the time but is just not being used wisely. If you need help with this, contact your local counselors through the website for the Department Of Housing And Urban Development (HUD), or local charities and government organizations. Beware of businesses that charge heavy fees for their services.
Step 4: Homeowner’s Assistance For Victim’s Of Covid-19
As the economy shut down and people were either laid off or experienced wage cuts, the government took steps to protect homeowners during this time. The protection was offered through the Federal Housing Authority (FHA) and the government lending agencies Fannie Mae and Freddie Mac. Under the protections offered, Freddie Mac and Fannie Mae offered to completely suspend or lower the monthly payments of families who had been impacted directly or indirectly by the virus. Foreclosures and evictions are also suspended. Homeowners will not have to make the suspended payments all at once after the suspension period ends. Since Fannie Mae and Freddie Mac provide mortgage services to about 29 million homeowners, almost half of all homeowners are protected under the new guidelines by FHA.
Private mortgage lenders have also relaxed restrictions on foreclosures and provide an initial three months or payment relief if you have suffered a financial or physical loss due to the coronavirus. This relaxation can extend up to12 months if the borrower continues to experience the impact of the pandemic.
Whether you have a government-backed or private mortgage, make sure you let your lender know about your inability to pay a loan well in time. The lender may request documents to assess how much assistance you need and you may need to file additional documents as well. The more time you give to your lender, the better you will be able to negotiate your options.
Step 5: Contact Charities That Help With Mortgage Payments
If you’ve tried to find funds within your budget, talked to your lender, and contacted friends and family as well but still cannot come up with the required funds, then the best thing to do is contact a not for profit or government body for loan assistance. Charities have restricted funding, and might only work with emergency cases. Some of the charities that help with mortgage payments are listed below:
- Society of Saint Vincent de Paul Financial Assistance
With over 700,000 members in 139 countries, the Society of Saint Vincent de Paul is one of the most widespread charities working to assist families around the globe. The Society is committed to helping people overcome their hardships by counseling and providing resources and aid. To get help, contact the nearest Catholic Church near you and ask them if they have a Society of Saint Vincent de Paul Conference in your locality. In case they do not have one, they will direct you to the nearest town or parish that does and you can go there. You can also contact Saint Vincent de Paul’s Social Service Office by phone and see if you qualify for help with your mortgage. They will not only help you with funds but also help you better manage your expenses to avoid any issues in the future.
- Catholic Charities USA
Founded in 1910 and headquartered in Virginia, USA, Catholic Charities offers help with affordable housing and mortgages, besides other areas like immigration, disaster
Relief and advocacy. Soon after it was founded, the Catholic Charities started a Housing Counselling Program in partnership with a number of banks, such as the Fannie Mae Foundation. The program expanded and many Catholic Charity locations and offices are now part of the Housing Counselling Network (HCN) that helps individuals not only receive affordable housing loans but also apply for adjustments in your current mortgage to help you avoid foreclosure and eviction. Furthermore, certain Catholic Charity locations and churches serve as National Intermediary For The United States Housing And Urban Development Organization. As part of this affiliation, the Catholic Charities guides individuals in Mortgage Scams Assistance Grants as well as Mortgage Modifications within its network. You can contact the Catholic Charities Foreclosure Prevention Services if you are behind your mortgage payment or already have a foreclosure notice sent to you. A counselor will review your current loan terms including interest rates and monthly payments. They will also help you go over your budget and release funds for your mortgage payment. Additionally, they may negotiate with your lender for modified loan terms and mortgage payments. It may also help you find a job if you’re struggling with unemployment, so you can afford your future mortgage payments.
- The Salvation Army
The Salvation Army operates in over 100 countries and has nearly 8000 locations within the US alone. It is committed to fighting homelessness and providing affordable housing and shelter to individuals. If you have been given a notice of foreclosure or need help with mortgage payments to avoid being served one in the near future, contact your nearest Salvation Army Family Service office. The office may provide you with an emergency fund to pay off your outstanding dues or may direct you to alternative organizations for help. They can also help you look for a job so you can gather funds to pay for your future mortgage.
- The United Way
With over 2.8 million volunteers around the globe, United Ways provides assistance to homeowners facing eviction and foreclosure. United Ways offers advice and in case of emergencies, financial assistance as well. You can contact the agency through their hotline number 2-1-1 or by visiting the local United Way office.
- Local Churches and Charities
If you are part of a congregation, talk to them about your financial hardships. Some churches and seminaries offer community-based financial aid and help to deserving members. Your local church may also be affiliated with a not-for-profit organization or the government and might be able to assist you with your mortgage payment.
Whatever option you choose to go with, keep in mind that you must act as early as possible. If you have experienced a job cut, or have been diagnosed with an illness that is using up your funds, let your loan provider know. You will have more options than you know.
What is Emergency Mortgage Assistance Program?
The Homeowner’s Emergency Mortgage Assistance Program was passed in Dec 1983 and is now commonly known as the Emergency Mortgage Assistance Program. The EMA is a loan and not a grant so it has to be paid back by the borrower. It is offered in almost all states. The EMA provides emergency assistance to homeowners facing foreclosure for as long as permissible by law.
Depending on the financial conditions and your income, you can qualify for either a continuing mortgage assistance loan or a non-continuing mortgage assistance loans. There is a maximum limit on whichever loan you might be qualifying for, which is either a loan period of up to 3 years or a loan amount of up to $60,000, whichever comes first. Loan conditions may vary from state to state.
The Emergency Mortgage Assistance Program is available to people who are facing financial hardship due to circumstances not in their control. These can include being laid off of work, labor strikes, divorce, medical conditions, being disabled, or having a low income, etc. Being jailed after committing a crime, or mismanaging your money by spending it unnecessarily count as circumstances in your control and are not entertained by the EMA.
To apply for an EMA, your lender must have issued you an Act 91 notice for foreclosure. You may not need to submit this notice with your application if you have a USDA, Rural Housing, or Farmers Home Administration mortgage.
Does Catholic Charities Help With Mortgage?
Catholic Charities does provide help with mortgages to individuals who are close to facing foreclosure or eviction or are finding it difficult to make their monthly payment. Catholic Charities provides counseling services as well as loans for eligible homeowners.
Mortgage Payment Grants
Mortgage payment grants are generally provided to families with low income or minorities to pay the down payment when securing a mortgage. Unlike an assistance program, the mortgage grant is not a loan but a gift and hence does not have to be paid back. Generally, grants are awarded to first time home buyers to help with their mortgage down payment and closing costs. You may be considered a first-time buyer if you haven’t owned any property in the past 3 years.
You can refer to the Department of Housing And Urban Development for a complete list of mortgage payment grants available in your state. For instance, the HOME Investment Partnerships Program, offered by the HUD, provides grants to states and localities in partnership with local not-for-profit organizations. These grants can then be used by community persons to rebuild, rehabilitate, or even get homeownership assistance if they have low to moderate-income.
Help With Mortgage Payments If Disabled
There are plenty of assistance options for disabled homeowners, though they are not nearly enough. Of the more than 40 million Americans living with some form of disability, only a small percentage have the ownership of houses. The following resources provide help with mortgage payments if disabled:
- The Department of Housing And Urban Development
The HUD offers a Homeownership Voucher Programme for disabled and low-income individuals and their families. Through these vouchers, you can get subsidized monthly mortgage payments as well as subsidized rent payments. You can contact your local public housing authority or PHA for more information on the voucher program.
- The Social Security Administration
Disabled and low-income individuals are offered supplementary Social Security Income or SSI to help pay with expenses. They may get free advice as they go about trying to figure out the expenses for their mortgage. As the disabled are helped with funds to use for other expenses, money can be freed for making the mortgage payment.
- Fannie Mae
The Fannie Mae Community HomeChoice Program is available in all states for disabled borrowers. These programs assist in helping disabled homeowners in getting better mortgage loan terms and may help with mortgage payments as well.
- Federal Housing Finance Agency (FHFA) Home Affordable Refinance Program (HARP)
HARP assists disabled homeowners if they have a very small number of late or missed payments on their mortgage within the past year. At a very low cost and without an appraisal, homeowners can get a new mortgage with a lower interest rate to help with their payments. You should contact your local bank or lender for guidance with HARP before you reach out to the FHFA.
- Aging and Disability Resource Center
Many times, a disabled or elderly homeowner may feel overburdened and lost when looking for options to get help with mortgage payments. To give free advice to such individuals, many states have established an aging and disability resource center to give guidance on resources to go to for home repairs, disability and old age modification, utility bills assistance, and mortgage assistance programs. They can help reduce the burden on people who may feel like they are trapped and a foreclosure is imminent.
As a closing note, remember that your lender, the state and not-for-profit organizations want to help you keep your house and make the necessary payments on it. Do not feel alone during hard times and keep yourself well-informed about your options. The first place to start looking for help with mortgage payments is with your loan servicer or lender, followed by the local HUD office. Stay persistent in your efforts and follow up on your applications.