It’s a federal program, so of course there’s paperwork. And you only have until July 22 to get it filled out and over to one of the counseling agencies helping to run the program. Call 855-346-3345 for information about participating agencies in your area.
You’ll know by Oct. 1 if you’ve been approved for EHLP because the money has to be obligated before the federal government’s fiscal year ends on Sept. 30th.
The toughest thing about the program may be the eligibility rules. If you want to be approved for EHLP, you can’t:
- Have federal tax liens
- Have past-due student loans (deferments and forbearance are OK)
- Have more than one 60-day late mortgage payment in the past two years
- Be in bankruptcy
- Have family income of more than $75,000 or 120% of the area median income
Then there are things you must have to get into EHLP:
- Be a minimum of three months late on your mortgage payment.
- Income that’s at least 15% less than what you were earning in 2009.
- The ability to make your full mortgage payment again in two years, because you’re likely to be working or have another source of income again by then.
That last requirement will be hard for HUD to prove; it’ll likely be up to an underwriter to decide who qualifies.
But if you can meet those requirements (as well as a bunch more that the credit counselors running the program will tell you about), EHLP is a sweet deal.
You have to agree to pay 31% of your family’s monthly income toward the mortgage payment (minimum payment is $150). The federal government loans you the money to pay the rest of your mortgage payment.
You can keep getting that subsidy for two years, or until you’ve borrowed $50,000.
The best part is that if you make your mortgage payments on time, the government forgives 20% of the EHLP loan every year. So in five years, your loan is completely forgiven.
If you think there’s even the slightest possibility you’d qualify for the program, you should go for it. You’ve got nothing to lose and a lot of mortgage payment help to gain.
What do you think of this program and its requirements? Do you think many home owners will be able to meet those stringent requirements — especially the student loan and tax lien rules — and do so within a month?