On Friday, the State of Florida announced that it will be using $350 million in federal funding to help reduce outstanding principal for underwater borrowers. What makes this program diff
erent from others is that only those who are current on their mortgages (have not been more than 60 days late within the past 24 months) can apply. I am glad to see a program designed to help homeowners before they are forced into credit-destroying short sales and foreclosures when they need to sell.
The program, called Florida’s Hardest Hit Fund – Principal Reduction, on-line application process begins this Wednesday, September 25, at 9:00 a.m. EST, and will accept only 25,000 applications initially. According to the web site:
The federal government has allocated funding to assist eligible Florida homeowners who owe at least 125% more on their home than its current market value, commonly referred to as the home being “underwater.” The Florida Hardest-Hit Fund Principal Reduction (HHF-PR) program will provide up to $50,000 to an eligible homeowner(s) to help reduce the principal balance of the first mortgage. The program is available in all 67 counties in the State.
Eligibility requirements include, but are not limited to, the following:
- Must be a Florida resident and a legal US resident/legal alien;
- Must occupy property as primary residence;
- Must be current on the monthly mortgage payment (cannot be 60 or more days late on the first mortgage within the past 24 months);
- First mortgage must have been originated prior to January 1, 2010;
- Must have an unpaid principal balance (UPB) that does not exceed $350,000 for the first mortgage;
- Loan-to-value for the first mortgage must be greater than 125%; and
- Total household income (including all persons living in the home age 18 years and older) must be less than 140% of the area median income (AMI) as provided by the US Department of Housing and Urban Development (HUD).
For more information about the program, or to apply on Wednesday, go to the Florida Hardest Hit Fund Principal Reduction site.