State partners with HUD to stop foreclosures
Delaware State Housing Authority (DSHA) has received $6 million from the U.S. Department of Housing & Urban Development (HUD) to assist homeowners who are behind in their mortgage due to unemployment, underemployment, injury or illness.
DSHA was chosen due to its successful track record of administering foreclosure prevention resources and is one of only six “substantially similar” state foreclosure prevention programs in the country. The funds will be managed through DSHA’s existing Delaware Emergency Mortgage Assistance Program (DEMAP). The funds were made available through the Dodd-Frank Wall Street Reform and Consumer Protection Act, which authorized HUD’s Secretary to allow funds to be administered by states that have an existing and substantially similar program - like DSHA’s DEMAP Program - to provide foreclosure assistance to homeowners.
“The DEMAP program is a critical tool to helping those Delaware families who face foreclosure through no fault of their own,” said Congressman John Carney. “The additional federal funding announced today provides much-needed resources to help Delaware homeowners and preserve our communities.”
Gov. Jack Markell said, “Homeownership is one of the cornerstones of our economy, but for some struggling Delawareans, the cost of housing has become an insurmountable problem. This financial assistance will make a tremendous difference to families who face the prospect of foreclosure and may be able to keep their home.”
DSHA Director Anas Ben Addi stated, “The foreclosure crisis has hit Delaware particularly hard. Our state has seen a 300 percent increase in foreclosure filings over its historical average. These funds will help more than 200 families keep their home, which will also stabilize neighborhoods and communities.”
Secretary of Labor John McMahon commented, “This is another great way that state agencies can work together to provide a comprehensive set of services for our clients. DEMAP will provide a necessary safety net for vulnerable families that have been hard hit by economic challenges.”
DSHA is working closely with community partners, including the Housing Counseling Agencies, the Attorney General’s Office, Office of the State Bank Commissioner, and the Delaware Department of Labor in reaching those homeowners in need of assistance.
The new resource will be used to provide Delaware homeowners with assistance in preventing residential mortgage foreclosure due to circumstances beyond their control, such as loss of employment or underemployment due to the economy, injury, or illness, which has resulted in a 15 percent or greater reduction in income.
The program will provide a declining balance, deferred payment “bridge loan” (zero percent interest, non-recourse, subordinate loan), and up to $30,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes, and hazard insurance for up to 24 months. Borrowers will be required to make a monthly contribution toward their mortgage payment. DEMAP is restricted to owner-occupied, primary residences.
To apply, homeowners should contact a HUD-approved housing counseling agency, which will guide them through the application process. Eligible applicants must be residents of Delaware, at least 90 days delinquent, demonstrate a reasonable expectation of resuming the mortgage payments in the near future, and meet income eligibility requirements.
For more information, contact Cynthia Karnai at 302-577-5001, via email at Cynthia@destatehousing.com or visit DeStateHousing.com.
