On Monday, June 20, 2011, the Department of Housing and Urban Development (HUD) launched a program designed to provide no-interest loans of up to $50,000, for a period of up to two years, to distressed/delinquent borrowers. The Emergency Homeowners’ Loan Program (EHLP) is funded in the sum of $1 billion provided under provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
EHLP funds are intended to assist those homeowners who have seen a drop in income of at least 15%, due to unemployment or underemployment, directly resulting from conditions that are beyond their control. A change in employment that results from harsh economic conditions or medical emergencies would qualify under EHLP.
In addition to meeting the initial 15% decrease in income, potential recipients of EHLP funds must also meet the following qualification requirements:
- Limit of $75,000 or 120% of the Area Median Income (AMI) on income received before the loss
- At least three months delinquent on mortgage payments (evidenced by official notification from the lender or servicer)
- Notification of intention to foreclose (by lender or servicer)
- Ability to resume repayment of the first mortgage within two years
- Maintaining the property as the primary residence at the time of application and for the duration of the loan (1 to 4 unit structure or condominium)
Currently funds have been allocated for 32 states and Puerto Rico. These states are not funded through the Treasury Department’s Innovation Fund for Hardest Hit Housing Market program. For a complete list of eligible states, the application process, general assistance, and an overview of how the program works, please visit HUD’s Emergency Homeowners’ Loan Program website.