Oregon's Hardest Hit Program: Homeownership Stabilization Initiative

The Oregon Homeownership Stabilization Initiative provides monetary help for unemployed and other struggling homeowners, as well as refinance options.

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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, Oregon received over $220 million to provide assistance to struggling homeowners so they can avoid foreclosure. Read on to learn about the different types of help available through Oregon’s Hardest Hit Fund program, called the Oregon Homeownership Stabilization Initiative (OHSI), 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.)

The Oregon Homeownership Stabilization Initiative (OHSI)

OHSI has several programs to assist Oregon homeowners who are having difficulty making their mortgage payments. The programs are:

  • The Home Rescue Program, which provides up to 12 months or $20,000 in mortgage payment assistance and up to $10,000 in reinstatement benefits to qualified applicants.
  • The Mortgage Payment Assistance Unemployment (MPAU) program, which makes monthly mortgage payments directly to the bank on behalf of a unemployed homeowner. (This program is in transition to the Home Rescue Program.)
  • The Loan Preservation Assistance (LPA) program, which provides funds to bring the mortgage current if the homeowner is behind on mortgage payments. (This program is also in transition to the Home Rescue Program.)
  • The Loan Refinancing Assistance Pilot Project (LRAPP), which assists underwater homeowners refinance their loan to reflect the current value.
  • The Rebuilding American Homeownership Assistance Pilot Program (RAHAPP), which also provides an opportunity for underwater homeowners to refinance their mortgage.
  • Homeowner Education and Verification (HEV) program, which is an educational tool for homeowners.

How OHSI Works

Assistance is provided in the form of a 0% interest, forgivable loan secured by a junior lien that is recorded against the property. The loan is forgiven at 20% each year until the balance reaches zero after five years. The lien will be removed once the five-year forgiveness period ends.

If you sell or refinance the home before the end of five years, you’ll need to repay the outstanding balance if there is sufficient equity after you pay off your first mortgage. If you lose the house to foreclosure during the five-year forgiveness period, you do not need to repay the balance.


To be eligible for OHSI assistance, your property must meet all of the below criteria.

  • Your property is a single-family dwelling.
  • The property is your primary residence.

Program Exclusions

You are not eligible for assistance through OHSI if one of the below conditions applies to you.

  • 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.)
  • You own more than one residential property.
  • You have been convicted of felony larceny, theft, fraud or forgery, money laundering, or tax evasion, in connection with a mortgage or real estate transaction within the last ten years.
  • You purchased the home through a land sale contract or your mortgage is with an individual (a private party).
  • Your first-lien mortgage is a home equity line of credit (HELOC).

Program Details: Home Rescue

The Home Rescue Program provides up to 12 monthly mortgage payments or $20,000, whichever is used first, to unemployed and underemployed homeowners. The program also helps homeowners catch up on their mortgage payments, so long as the homeowners are no more than $10,000 behind on their payments.

Additional criteria. You must earn less than 120% of state median income, based on household size, and you have an unpaid principal balance less than your county’s FHA loan limit. Also, your income must be at least 10% less than you earned in in either 2011 or 2012.

For more information, go to http://oregonhomeownerhelp.org, click on "Programs" and then "Home Rescue Program." Or you can go to http://oregonhomeownerhelp.org/en/faqs/mpat to read a FAQ about the program.

Program Details: MPAU

Note: This program is in transition to the Home Rescue Program. If you already applied for MPAU, and have questions e-mail customer service at homeowner.help@hcs.state.or.us, or call: (503) 986-2025.

Program Details: LPA

The Loan Preservation Assistance (LPA) program is also transitioning to the Home Rescue Program.

Program Details: LRAPP

This program provides a refinancing opportunity for underwater homeowners in Crook, Deschutes, Jackson, Jefferson, and Josephine counties.

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

  • You experienced a verifiable hardship (such as unemployment, underemployment, reduced pay or hours, decline in business earnings, death, disability, or divorce from a borrower or co-borrower) that resulted in the inability to pay your mortgage.
  • You have recovered from the hardship and are earning enough income to support a new mortgage that is based on the current market value of the home (but you are not earning more than 150% of statewide median income).
  • The property is in Crook, Deschutes, Jackson, Jefferson, or Josephine County.
  • Your original loan amount was $499,000 or less.
  • The value of your home is at least 20% less than unpaid principal balance.
  • Fannie Mae or Freddie Mac does not own your loan. (You can find out if Fannie Mae or Freddie Mac owns your loan by using their online lookup tools at www.knowyouroptions.com/loanlookup and https://ww3.freddiemac.com/corporate.)

Program Details: RAHAPP

RAHAPP aims to provide an opportunity for underwater homeowners in Multnomah County to refinance their mortgage. The program provides two refinancing options:

  • 15-year mortgage at 4% fixed interest, with a $200,000 loan amount, the APR would be 4.129%.
  • 30-year mortgage at 5% fixed interest, with a $200,000 loan amount, the APR would be 5.077%.

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

  • You must be significantly underwater.
  • You must be current on your existing mortgage payments.
  • Your existing mortgages cannot be owned or guaranteed by Fannie Mae or Freddie Mac.
  • The unpaid principal balance of all mortgages combined on your home must be $250,000 or less.
  • You must have negative equity in your home with a combined loan-to-value ratio between 105% and 125%.
  • You cannot have any mortgage loan payments that were 30 or more days late in the past 6 months or 30-59 days late in the past 12 months.
  • Your housing expense ratio (the ratio of your total monthly mortgage payment including principal, interest, taxes, insurance, and association fees to your total monthly gross income) must be 45% or less.

Program Details: Homeowner Education and Verification

This program is designed to provide program participants with the tools and information that will help them make the most of their assistance.

Servicer Participation

Servicer participation in the OHSI 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.)

To find out if your servicer is participating, go to www.oregonhomeownerhelp.org and click on “Servicers.” If your servicer has not enrolled, you can ask OHSI to contact your servicer to ask them to participate by sending an e-mail to ohsi.payoffs@hcs.state.or.us with a subject line of "servicer enrollment." Include the name and contact information of your servicer in the email message.

How to Apply

As of June 2014, Oregon has spent most of the $220 million it received, though it doesn't hurt to apply so long as the program is still open.

Go to www.oregonhomeownerhelp.org, and then “Programs” to select the program you are interested in. After you review the instructions and complete the online eligibility questionnaire, you can click “Apply Now” to start an application.

The opportunity to apply to OHSI programs is restricted. MPA-U and LRA applications are open on a two-week cycle with only a certain number of slots available. (You can find out the relevant cycle periods for MPA-U and LRA going to www.oregonhomeownerhelp.org and then “Programs” to select the program you want to learn about. Then look at “Check Availability Schedule.”) LRAPP program slots open at noon on the first business day of the month.

Once slots are filled, no more applications are accepted for that cycle. If all the slots are gone, you must wait for the next cycle to start before you can apply.

To apply to RAHAPP, go to www.oregonhomeownerhelp.org, then “Programs,” then "Rebuilding American Homeownership Assistance Pilot Program," and choose "Apply."

For More Information

If you would like more information about OHSI or its programs, call (503) 986-2025 or email homeowner.help@hcs.state.or.us.

To learn about federal government programs for struggling homeowners, visit our Government Foreclosure Prevention Programs topic area.

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