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The Florida Housing Finance Committee just announced that Florida homeowners may begin to apply for a share in the $1 billion of federal funds available through the Hardest Hit foreclosure prevention program. Applications will be accepted beginning on April 18, 2011

The Hardest Hit money comes from the federal Troubled Asset Relief Program. The program awarded $7.6 billion to Florida, along with 17 other states and Washington D.C. Florida was actually one of the first of the states to receive the money back in February 2010. However, Florida is the only one of the first recipients of the funds without an operational program.

With nearly 20 percent of Florida’s 3.2 million mortgages currently in foreclosure, the federal funds would be welcome relief. However, there had been doubt about whether the governor would allow Floridians to apply to the program. Finally, the governor has approved the program, but only with the reduction of the amount of relief that homeowners may receive.

The governor also added the requirement that homeowners contribute at least 25 percent of their monthly income and pay at least $70 per month to their mortgage. These changes to the original plan are estimated to allow the program to reach 40,000 Florida homeowners, at least double the number of homeowners as under the original plan.

The eligibility requirements for application to the Hardest Hit Program are as follows:

  • The homeowner must be a Florida resident.
  • The home must be the Florida resident’s primary home.
  • Total household income must be below a certain threshold for the area.
  • Monthly housing debt must be more than 31% of total monthly income.
  • The homeowner must have suffered a financial hardship.
  • The homeowner must not have caused the financial hardship.
  • Loans can be no more than 180 days delinquent.

Eligible homeowners will have two options under the relief program. They will be able to receive up to $12,000 towards their mortgage payments for a period of six months or $6,000 in order to bring delinquent mortgages current.

The program is intended to help the jobless and underemployed who are desperately trying to stay in their homes. Although the relief is temporary, officials are hoping that it will give Florida homeowners the opportunity to focus on obtaining employment that can help them resume making mortgage payments without the stress of facing imminent foreclosure.

Source: The Palm Beach Post, “Florida sets April 18 start date to apply for share of $1 billion in mortgage help,” Kimberly Miller, 5 April 2011