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Saturday, Nov. 22, 2014

Affordable loan program helps owners keep homes

Thursday, July 14, 2011

Bedford is one of the 29 counties in Tennessee that's been hardest hit by the recession, but fortunately, forgivable loans are available to those who are struggling to pay their mortgage.

According to data compiled by RealtyTrac, one in every 1,358 housing units in Bedford County received a foreclosure filing in May 2011, with the northern part of the county particularly hardest hit. A total of 150 homes are in foreclosure, with an average foreclosure sales price of $69,755

In Unionville, one out of 518 homes are going through some stage of foreclosure, while Bell Buckle has a rate of one in every 577 housing units in the process of foreclosure.

Shelbyville has a rate of one out of 1,595 homes undergoing foreclosure, while data for Wartrace and Normandy was not available.

In Tennessee 2,376 foreclosures were filed in May -- nearly one in 1,170 homes. The state's foreclosure rate ranks 31st, according to RealtyTrac.

But help with your mortgage is available through the Hardest Hit Fund Program -- a free U.S. Treasury program administered by Tennessee Housing Development Agency (THDA) that is accessible through NeighborWorks Alliance of Tennessee, which provides loans of up to $20,000 to cover mortgage expenses for up to 18 months.

The funds can be used to pay past-due, current and future monthly payments on mortgages and mortgage-related expenses such as property taxes, homeowner insurance and homeowner dues.

Applications for the program are handled by THDA partners, which includes NeighborWorks Alliance of Tennessee -- a statewide consortium of NeighborWorks America-chartered, non-profit organizations. Affordable Housing Resource in Nashville, Knox Housing Partnership in Knoxville and United Housing in Memphis make up the Alliance.

The loans are available to Tennesseans who are out of work or underemployed, meaning their income is reduced by 30 percent or more, and through no fault of their own, are unable to make mortgage payments and at risk of foreclosure.

Also eligible are homeowners who had previously been without work or underemployed that are delinquent because of overdue payments accumulated during that period.

How to apply

Those eligible homeowners can apply for the program by calling 888-588-9129, by e-mailing sbosworth@ahrhousing.org or visit their website at ahrhousing.org.

They must provide a financial hardship affidavit with appropriate documentation, underemployment and joblessness must be through no fault of their own, and must have occurred after Jan. 1, 2008. The homeowner also must have a history of timely mortgage payments with no more than two instances of delinquency.

A borrower's income must be below $74,981, the principal, interest, taxes and insurance must be greater than 31 percent of household income after reduction of income, and the person borrowing must have no more than six months of reserves to cover their mortgage payments.

The balance on the home cannot exceed $226,100, it must be a Tennessee owner-occupied, primary residence, and are limited to existing single-family homes or condominiums (attached or detached), including manufactured homes on foundations permanently affixed to real estate.

After applying, there will be an initial phone consultation, and then a representative of NeighborWorks will meet with the homeowner to complete the loan origination documents. The alliance will certify all the required information and submit them to THDA for underwriting, with the process taking approximately 30 days.

Once underwritten, the homeowner closes the loan with NeighborWorks' assistance at their office, a local bank or at the borrower's designated location.

The payments are made monthly by THDA directly to the mortgage provider, with funds for overdue payments disbursed at closing. The loans are zero interest, deferred-payment, and the bowwower is not liable for the amount of the loan.

The loan's forgiveness clause reduces annually the loan amount by 20 percent of the original amount for every year the borrower stays in the home up until five years, at which point, the loan is considered repaid and the lien securing the note is released. If the property is sold, refinanced or no longer owner-occupied and sufficient equity proceeds are available, the loan balance will be due and payable.

Also, should the homeowner become reemployed, they can continue receiving assistance for up to an additional two months after taking the new job, however, if they become reemployed but the mortgage payments still exceed 31 percent of their income, then the assistance can continue up to the appropriate maximum of 12 or 18 months.

The program assistance is available in all 95 Tennessee counties, with those in the other 66 Tennessee counties impacted eligible to apply for forgivable loans up to $15,000 to cover up to 12 months of mortgage expenses.

Aside from Bedford, the counties in Tennessee hardest hit by the recession are Bledsoe, Carroll, Cocke, Crockett, Fentress, Gibson, Greene, Hamblen, Hardeman, Haywood, Houston, Hickman, Jefferson, Lauderdale, Lewis, Madison, Macon, Marshall, McMinn, McNairy, Maury, Monroe, Rhea, Sevier, Shelby, Smith, Trousdale and Warren.