Washington, D.C.’s HomeSaver program, which is funded through the Hardest Hit Fund, provides mortgage payment and loan reinstatement assistance for homeowners who are facing foreclosure as a direct result of unemployment or underemployment. Read on 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.)
Washington, D.C. was awarded over $20 million in funds through the Hardest Hit Fund to help eligible homeowners avoid foreclosure. (Learn more about the Washington, D.C. foreclosure process.) To do this, Washington, D.C. launched the HomeSaver program in January 2011.
The HomeSaver Program
The HomeSaver program is designed to help homeowners who have experienced an income loss due to unemployment or underemployment. The three types of assistance available under the program are:
- Lifeline Assistance, which provides a one-time payment of up to six months mortgage delinquency including principal, interest, tax and insurance (PITI), as well as late fees, and condo fees.
- Mortgage Assistance, which provides up to 15 months or a maximum of $32,385 in monthly mortgage payments.
- Restore Assistance, which assists a recently re-employed homeowner by providing a one-time payment of up to $32,385 to catch up on delinquent mortgage payments.
How the HomeSaver Program Works
Assistance is provided in the form of a loan that is forgiven at 20% per year. At the end of five years, the loan is balance will be zero. You only need to repay the loan if you sell or refinance during the five-year forgiveness period and there are sufficient equity proceeds available.
To be eligible for the HomeSaver program, you must meet all of the below criteria.
- You are unemployed and have received Unemployment Insurance benefits within six months of your application date or are underemployed and experienced a 25% reduction in your employment income.
- You are named on the deed of trust (mortgage).
- Your annual income is $128,760 or less.
Home Eligibility Criteria
Additionally, your existing mortgage and the property securing the mortgage must meet the below criteria.
- The property is located in Washington, D.C.
- The property is your primary residence.
- The mortgage balance is $729,750 or less.
You are not eligible for the HomeSaver program 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 have received a notice of foreclosure sale. (To learn the ins and outs of the foreclosure process, visit our Foreclosure Center.)
- The property is a co-op unit.
If you qualify, assistance is paid directly to your mortgage servicer. (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.)
Servicer participation in this program is voluntary. To find out if your servicer is part of the HomeSaver program, go to www.homesaverdc.org then select “Participating Servicers” to obtain a list of servicers that have agreed to accept program funds.
How to Apply
To apply for HomeSaver assistance, go to www.homesaverdc.org and click on click on “Start Now” to begin the application process. Once you finish setting up your profile, you will need to complete the seven-step online application during which you must provide:
- homeowner information
- contact information
- property information
- lender information
- a financial worksheet
- a hardship letter, and
- various other required documents, such as bank statements, paystubs, etc. (For a complete list of the documents you’ll need for the application, go to “Document/Submission checklist” on the right-hand side of the “Start Now” page.)
As part of the process, a housing counselor will contact you to guide you through the procedures and develop an action plan.
Beware of Scams
The HomeSaver program is free of charge and you should not pay for any services associated with applying for assistance. Do not pay any company that promises to expedite your application or guarantees approval.
For More Information
Funds are administered on a first-come, first-served basis for qualified homeowners. (As of the end of November 2013, Washington, D.C. has distributed nearly 70% of its designated hardest hit money.) If you would like more information about applying to the HomeSaver program, go to www.homesaverdc.org/contact and fill out the contact form.
For information on federal government programs for struggling homeowners, visit our Government Foreclosure Prevention Programs topic area.