State given $56 million to help distressed homeowners

Washington State has been allocated $56 million of federal money to help distressed homeowners under HUD’s Emergency Home Loan Program (EHLP).

Applications are now being taken. Under certain conditions, the money may not need to be paid back.

The funding, approved last year, is now getting disbursed. EHLP will offer a zero interest, forgivable bridge loan to homeowners who have experienced a substantial loss of income (a reduction of at least 15 percent) due to unemployment or underemployment caused by adverse economic conditions or medical condition.

Approved homeowners are eligible to receive one-time EHLP assistance to pay certain arrearages to bring them current, as well as ongoing monthly assistance to help them to make their monthly mortgage payments (including payments of principal, interest, taxes, and insurances).

Assistance is limited to a maximum duration of 24 months, or up to a maximum loan amount of $50,000 in mortgage payment assistance, whichever occurs first. The EHLP loan is secured by a junior lien against the approved homeowner’s principal residence and is forgivable over a 5-year principal reduction period.