States reopen 2010 mortgage relief program during COVID-19

July 1, 2020 - 5 min read

Hardest Hit Funds offer COVID mortgage relief for homeowners

The COVID pandemic has put many homeowners in a tight financial spot, making it hard to keep up with housing costs.

In response, some states have reopened local Hardest Hit Funds as part of their coronavirus mortgage relief efforts.

The Hardest Hit Fund (HHF) launched in 2010 to help homeowners in certain areas who were struggling with their mortgage payments after the 2008 recession.

Now, some states are bringing that program back to help homeowners in the coronavirus economy.


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States reopening their Hardest Hit Funds

The following states reopened their Hardest Hit Funds, though they offer varying forms of assistance.

Several states’ websites — including California, Georgia, and North Carolina, among others — note that applications there are closed at this time.

But it’s worth checking back often for updates in case additional assistance is added.

How much aid money is available?

The amount of money available through Hardest Hit Funds — and who qualifies for aid — varies by state.

Some states, including Alabama and Kentucky, offer up to $30,000 in assistance.

New Jersey and Mississippi provide a maximum of $50,000, but Mississippi’s Home Saver website indicated that the program may be capped at 1,000 people.

Note: Some HHF programs have relatively low caps on the number of people who can receive aid.

Nevada’s assistance falls at the lower end of the spectrum, at $9,000.

It’s important to note that the programs linked above can change or close, particularly as states receive high volumes of applications.

Use those links as a jumping-off point to find out what resources are available in your area and whether you might qualify.

Who qualifies for Hardest Hit Fund mortgage relief?

As with types and amounts of assistance, states may have different program criteria. Eligibility may be based on:

  • Income
  • Loan amount
  • Whether the home is your primary residence
  • Delinquency status
  • Other assets you own

Some programs apply to borrowers who cannot pay their mortgages currently, while others assist those who have fallen behind and need help bringing their accounts current.

Other programs target borrowers who are able to pay now but cannot afford back payments they missed when they were out of work.

If you need COVID-19 mortgage relief, it’s best to apply as soon as possible.

Generally speaking, you must have gotten behind because of unemployment or other unexpected circumstances that caused financial hardship.

It’s also important to note that each state may cap the number of applications it will approve based on how much money is available in its Hardest Hit Fund.

If you need COVID-19 mortgage relief, it’s best to apply as soon as possible or contact your state housing department to learn about your options.

Do you have to repay HHF assistance?

You’ll want to get program specifics for your state, but you likely will not have to repay assistance you receive from a Hardest Hit Fund.

Some applicants will receive a forgivable loan, which means you won’t owe on the principal or interest unless you sell the house for a profit.

Programs may also require you to stay in the home for a certain period of time in order for the relief funds to be forgiven.

How long will these programs remain open?

Lawmakers are aware that Americans are continuing to suffer because of coronavirus, and that the economy could worsen if outbreaks continue or a second wave hits in the fall. They may create additional programs for struggling homeowners in the coming months.

If you are urgently in need of help, you can contact your state housing department to ask if they are offering any other types of COVID-19 mortgage relief.

They may offer counseling or other types of aid outside the Hardest Hit Fund.

Your local housing departments may also be able to refer you to housing assistance or other types of financial relief in your area.

Background on the Hardest Hit Fund

The Hardest Hit Fund was created by the Obama administration, aimed not only to aid struggling borrowers but also to stabilize the recovering housing market.

Rather than opening in all 50 states, the fund targeted the states that suffered most during the recession. Target areas either had exceptionally high unemployment rates, or their real estate markets were badly hurting.

The Hardest Hit Fund was designed not only to help people who were out of work and behind on their mortgage payments but also those who were “underwater” on their mortgages. (Meaning their houses were worth less than what they owed on their loans.)

While it’s likely that many homeowners today need help with their mortgage payments because they were laid off due to the pandemic, the fund historically included several types of assistance.

In addition to helping unemployed or underemployed borrowers, it also gave money to people who wanted to get out of their current homes and into more affordable properties.

State programs can include down payment assistance and principal reduction as well.

Other types of COVID-19 mortgage relief

If your state does not have a Hardest Hit Fund, or if the program is currently closed, you can apply for mortgage forbearance to pause your payments temporarily. This may be a good option if you expect to return to work and earn the same salary or wage you were previously.

But remember that during the forbearance, your loan will continue to accrue interest and your repayment period will be extended because you paused your payments and now owe more money.

You might also consider refinancing your mortgage, particularly if you have a government loan. Depending on what your current interest rate is, you may be able to qualify for a lower rate and decrease your monthly payments, making them more manageable.

The most important thing to do if you can’t make your payments is to contact your loan servicer and ask for help.

The most important thing to do if you can’t make your payments is to ask for help.

Contact your loan servicer and explain your situation; they may be able to suspend or restructure your payments for a time.

In addition to applying for Hardest Hit assistance, look into local relief programs and counseling organizations that can help you come up with a plan for how to get back on track.

The sooner you find out what types of aid you’re eligible for, the sooner you will be able to regain control of your mortgage and rest assured that your home is secure.

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Casey Morris
Authored By: Casey Morris
The Mortgage Reports contributor
Casey Morris is a finance and tech journalist. She has written for Forbes Asia, The Washington Post, and a number of finance publications and institutions.