Michigan's Hardest Hit Fund Program

Michigan’s Hardest Hit Fund program, called Step Forward Michigan, provides funds to help a homeowner catch up on a delinquent mortgage, property taxes, or condominium fees.

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, Michigan received over $498 million to provide assistance to homeowners who are struggling to make their mortgage payments. Read on to learn about the different types of help available through Michigan’s Hardest Hit Fund program, called Step Forward Michigan, and find out if you may be eligible for assistance. (To learn more about the Hardest Hit Fund and the various state programs funded by it, visit our Hardest Hit Fund topic page.)

Step Forward Michigan

Step Forward Michigan provides funds (up to $30,000) to help a homeowner catch up on a delinquent mortgage, property taxes, or condominium fees. Funds go directly to the lender, county treasurer, or condo association to reinstate the account, if an eligible hardship caused the delinquency. Eligible hardships include job loss, a medical event, reduction of gross income, death, divorce, or a one-time critical housing repair.

How Step Forward Michigan Works

Assistance is provided in the form of a 0% interest, forgivable loan secured by a junior lien that is recorded against the property. No payments are required from the homeowner and the loan is forgiven at 20% per year so long as the property remains your primary residence for five years. At the end of five years, the lien is released.

Borrower Eligibility

To be eligible for Step Forward Michigan assistance, you must meet all of the below criteria.

  • You are a Michigan resident and a legal U.S. citizen or a legal alien.
  • You own the property and occupy it as your primary residence.
  • You have limited cash reserves no greater than $10,000.
  • You have the ability to sustain ongoing payments.

Home Eligibility Criteria

Additionally, your existing mortgage and the property securing the mortgage must meet the below criteria, among other things.

  • The property is a single-family home, condominium, or a one-to four unit dwelling (if you occupy one unit as your primary residence).
  • The property is not abandoned, vacant, or condemned.
  • The property is not currently listed for sale.
  • The unpaid principal balance is not more than $729,750.

Mobile or manufactured homes are eligible if on a foundation, permanently affixed and taxed as real estate. Mobile homes located in a mobile/manufactured home park are not eligible. Learn more about what happens if you are struggling to pay your mobile home loan.

Program Exclusions

You are not eligible for the Step Forward Michigan program if one of the below conditions applies to you.

  • You filed bankruptcy and the bankruptcy is active, unless you obtain permission from the bankruptcy court and your lender agrees to accept the funds during the bankruptcy. (If you previously filed bankruptcy and it was dismissed or discharged, then you are eligible to apply for the program.)
  • You have been convicted of a mortgage-related felony such as larceny, theft, fraud, forgery, money laundering, or tax evasion, within the last ten years.
  • A foreclosure sale has been completed.

Servicer Participation

Servicer participation in the 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.) All assistance funds are sent directly to the servicer on behalf of the homeowner so the servicer must agree to accept the funds.

To find out if your servicer is part of the Step Forward Michigan program, go to www.stepforwardmichigan.org and click on “Participating Partners.”

How to Apply

Go to www.StepForwardMichigan.org and hit the “Apply Now” button to begin your online application.

For More Information

If you would like more information about Step Forward Michigan, you can call 866-946-7432 or fill out the contact form at www.stepforwardmichigan.org/contactus.

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