August 04, 2010
North Carolina Housing Finance Agency
The North Carolina Housing Finance Agency announced today that the U.S. Treasury Department has approved the Agency’s plan to use $159 million of federal Hardest Hit Program funds to help North Carolinians who have suffered job loss or other financial hardships to save their homes from foreclosure. North Carolina is one of five states approved today for such funding.
“We expect that over the next three years this effort will enable 7,200 North Carolina workers to keep their homes,” said A. Robert Kucab, executive director of the housing finance agency. “It will also help stabilize property values in their neighborhoods by reducing the number of foreclosure sales,” Kucab said.
“North Carolina lost nearly 278,000 jobs between 2007 and 2009. In 2009, a quarter of the state’s population lived in a county with an unemployment rate of 12 percent or higher, compared with 15 percent of the national population. That is why our agency is focusing on relief for homeowners who have suffered job loss or loss of income. We deeply appreciate the freedom and encouragement Treasury has given us to design programs to address specific needs in our state.”
While the new loans will be available statewide, homeowners in 50 high unemployment counties will be eligible for additional help.
The housing finance agency has designed the new programs based on its experience with the smaller, state-funded Home Protection Program that the General Assembly initiated in the wake of the Pillowtex plant closing. Many of the same local counseling agencies that have delivered Home Protection loans will help deliver the new program.
Home Protection Program loans will continue to be available statewide while the Hardest Hit programs are being phased in, between October 2010 and April 2011.
Most of the new funds--$115 million--will be used to make mortgage payments for unemployed workers while they seek jobs or complete job training in a new field. Others who, through no fault of their own, have gotten behind on their mortgage payments will be eligible for assistance while they get back on their feet.
Maximum loan amounts are 24 months of mortgage payments, up to $24,000 in non-targeted counties, and 36 months of mortgage payments, up to $36,000 in high unemployment counties, where it may take longer to find a new job. The mortgage payment program will be piloted in 17 counties beginning in mid-October, and will be offered statewide in December.
Two smaller programs will reduce mortgage payments to an affordable level for homeowners who are working at reduced wages. One will refinance a high-cost second mortgage and the other will reduce mortgage principal through a loan modification. The Agency will work with mortgage servicers, investors, community banks, credit unions and other lenders who agree to participate in these loan programs. The second-mortgage refinance program will be offered only in high unemployment counties. The programs will be phased in, January through April 2011.
In all the new programs, the assistance is provided as a zero-interest loan that is forgiven over 10 years, as long as the owner continues to live in the home.
Homeowners who are currently behind on their mortgage payments should call a HUD-approved counselor in their area for assistance at no cost to themselves. A list of counseling agencies that offer North Carolina’s Home Protection Program is attached.
A complete list of HUD-approved counselors is posted on the federal government website
(click the “Find a Counselor” tab at the top of the page). Free referrals and telephone counseling is available from a HUD-certified counselor on the Homeowner’s HOPE ™ Hotline, 1-888-995-HOPE.
The Treasury’s “Hardest Hit Fund” is authorized under the Emergency Economic Stabilization Act of 2008, Troubled Asset Relief Program (TARP). North Carolina and four other states (Ohio, Oregon, Rhode Island and South Carolina) were selected because of the large percentage of their populations living in counties with high unemployment rates in 2009.
In February 2010, Treasury made “Hardest Hit” funds available to five states where home values have declined sharply: Arizona, California, Florida, Michigan and Nevada.
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