Property Trax: HUD launches new program to help unemployed homeowners facing foreclosure with no-interest loans in 27 states, including Wisconsin
Karen Rivedal/Madison.com (Wisconsin)
20 June 2011

Interest-free loans worth up to $50,000 should soon be available for many borrowers at risk of losing their homes because of unemployment or medical disability.

The Department of Housing and Urban Development would provide the mortgage assistance for up to two years, under a program that was to be created under the Dodd-Frank Act but faced numerous delays after resistance from House Republicans and other factors.

The $1 billion HUD fund is expected to help up to 30,000 distressed homeowners in 27 states and Puerto Rico, according to this story from HousingWire this afternoon.

The average loan will likely be about $35,000, the story said.

The money is to be distributed with community partners through NeighborWorks America.

You can find out more about NeighborWorks America and the foreclosure assistance programs it offers here. I last wrote about Neighborworks America in this previous Property Trax entry.

And look here to find a Neighborworks office in Wisconsin to contact. GreenPath Debt Solutions, a HUD-approved foreclosure counseling agency, may also be able to provide assistance.

But those interested may want to move fast.

The House voted in March to end the program before it had even begun, so its fate now lies with the Senate, which has not yet taken up the bill.

The states in which HUD will offer the program are Alaska, Arkansas, Colorado, Hawaii, Iowa, Kansas, Louisiana, Maine, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, South Dakota, Texas, Utah, Vermont, Virigina, Washington, West Virginia, Wisconsin and Wyoming.

In addition, five states -- Connecticut, Delaware, Idaho, Maryland and Pennsylvania -- are already offering similar programs.

Seems strange that some of the states hit hardest by the housing crash -- namely, Nevada, Florida, Arizona and California -- aren't on either list.

Housing experts at UW-Madison have long favored foreclosure assistance for the unemployed  to address the housing crisis.

One hopes this federal program works a lot better, though, than the Obama Administration's much-maligned flagship foreclosure prevention program, known as HAMP.