Alabama's Hardest Hit Fund Program

The Hardest Hit Alabama program provides mortgage payment assistance to unemployed homeowners.

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The Hardest Hit Alabama program, which is funded through the federal Hardest Hit Fund, provides mortgage payment assistance to unemployed homeowners. Keep reading to get an overview of the program, learn how much assistance is available, and find out if you are eligible.

Hardest Hit Fund

In 2010, the U.S. Department of the Treasury created the Hardest Hit Fund to provide targeted aid to homeowners in those states most affected by the housing market crash. As part of this program, $7.6 billion in aid was allocated to the 18 states, along with Washington, D.C., that experienced the most extreme home price declines and high unemployment rates as a result of the economic crisis. (Learn more about the Hardest Hit Fund.)

Alabama was awarded $162 million in funds through the Hardest Hit Fund to help eligible homeowners avoid foreclosure. (Learn more about the Alabama foreclosure process.) To do this, Alabama set up the Hardest Hit Alabama (HHA) program. 

As of the end of November 2013, Alabama's Hardest Hit Fund has distributed 21% of its designated funds.

The Hardest Hit Alabama Program

Unemployed homeowners who have fallen behind in their mortgage payments can use HHA funds to bring their loan current and cover future mortgage payments.

The program will advance an initial payment of up to $12,500 to pay past-due amounts, including PITI (principal, interest, taxes, and insurance), late fees, and attorneys' fees. (If you need more than $12,500 to reinstate your loan, you can cover the shortfall yourself if your loan servicer agrees to this arrangement.)

The program also provides mortgage assistance for as long as:

  • 12 months (up to $15,000), or
  • 18 months (up to $25,000) if you live in a federally-declared disaster county.

How the Program Works

HHA assistance is provided in the form of a forgivable, 0% interest, junior mortgage recorded against the property. You only need to repay the loan or a portion of it if one of the following occurs:

  • You no longer occupy the property as your primary residence.
  • You sell the property.
  • Mortgage fraud is discovered.

Borrower Eligibility for HHA

To be eligible for HHA assistance, you must meet all of the below criteria.

  • You are currently receiving state-administered unemployment benefits.
  • Your household income does not exceed $77,560 (including all income of occupants 18 years or older).
  • You occupy the residence as your principal residence.
  • You are less than $7,500 past due on your mortgage payments.

Home Eligibility Criteria for HHA

Additionally, your existing mortgages and the property securing the mortgages must meet the below criteria.

  • The property is located in Alabama.
  • You owe no more than $258,690 on your home's mortgage, including subordinate loans.
  • You do not rent, lease, sell, assign, or transfer any interest in the residence to another party and do not enter into any such agreement without the prior approval of the Alabama Housing Finance Authority.
  • You do not use the residence as investment property or receive any income from the residence or the land.

Manufactured homes are eligible for HHA assistance if you own both the home and the land it sits on. Learn more about what happens if you are struggling to pay your mobile home loan.

Second homes and vacation homes are not eligible for this program.

HHA Bankruptcy Exclusion

You are not eligible for assistance through HHA if you filed bankruptcy and the bankruptcy is active. If you previously filed bankruptcy and it was dismissed or you received a discharge, then you are eligible to apply for the program.

Mortgage Servicer Participation

Mortgage servicer participation in this program is voluntary. (A mortgage servicer is the company that collects monthly mortgage payments from borrowers on behalf of the owner of the loan, as well as tracks account balances, manages the escrow account, handles loss mitigation applications, and pursues foreclosure in the case of defaulted loans.)

Ultimately, it is up to your mortgage servicer to decide if your loan qualifies for participation in the program. To find out if your servicer is part of the HHA program, go to

How to Apply

To apply for assistance, go to and click on “Apply Now” to complete the online application. Have the following information available:

  • Your mortgage loan information. (You can find the relevant information on the payment coupon that your mortgage servicer sends you each month.)
  • Information about your unemployment compensation.
  • Your financial information (such as bank statements, pay stubs for any occupants 18 years or older, etc.)

You will need to submit the supporting documents by fax, email, or via a scanned upload.

Once you have submitted all of your documents, your application goes to the underwriting stage where HHA underwriters review your application to ensure it meets all HHA program requirements and verify your information. After the application is approved, the loan closing will be scheduled. After the closing, you must complete and send a monthly occupancy statement to your HHA counselor or underwriter.

Additionally, the HHA will verify your eligibility for unemployment benefits each month. HHA benefits will end two months after you find a new job, if you have not exceeded the maximum assistance allowed.

Beware of HHA Scams

There have been some reports of Alabama citizens being contacted with an offer to help with the HHA application for a fee. The HHA program is free and you should not pay for any services associated with applying for assistance.

For More Information

For more information on the HHA program, you can go to, send an email to, or call 1-877-497-8182.

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