"Hardest Hit Alabama" is a federally-funded program that offers foreclosure avoidance assistance to eligible homeowners. If you qualify, you might receive money to make your mortgage payments, assist you in getting a loan modification, or to help you sell your home in a short sale.
Keep reading to get an overview of the programs, learn how much assistance is available, and find out if you’re eligible.
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, DC, that experienced the most extreme home price declines and high unemployment rates as a result of the economic crisis. (To learn more about the Hardest Hit Fund in general, including which states have Hardest Hit programs, see Save Your Home From Foreclosure: Hardest Hit Fund Programs.)
Alabama received $162 million in funds and set up the Hardest Hit Alabama program to help eligible homeowners avoid foreclosure. (Learn about the Alabama foreclosure process.)
The program is scheduled to continue through 2020, though other states have shuttered their programs early when funding ran out so it's best to apply for help as soon as possible.
The Hardest Hit Alabama program offers three types of assistance to homeowners who're facing a foreclosure:
The maximum amount of assistance per program is $30,000, though homeowners may participate in more than one program (limited to one component per program for a maximum total assistance amount of $60,000).
Here are the basic eligibility requirements for each program.
To qualify for the mortgage payment assistance program, you have to currently receive—or have previously received—unemployment compensation benefits or experienced a substantial reduction in your household income.
Unemployed homeowners. Homeowners who’ve received unemployment benefits on or after January 2013 might qualify for assistance.
Underemployed homeowners. Underemployed homeowners have to show a financial hardship resulted in a 15% or greater reduction in total household income within the past 24 months.
The loan modification and short sale assistance programs are open to all homeowners, if they meet all other criteria.
For specific details about qualifying for assistance, go to the Hardest Hit Alabama website.
Certain homeowners and types of property are ineligible for assistance from Hardest Hit Alabama, including:
Manufactured homes are eligible for assistance if both the manufactured home and the land that it sits upon are mortgaged together as real property. (Learn more about what happens if you're struggling to pay your mortgage on a manufactured home.)
To receive assistance, your servicer has to participate in the Hardest Hit Alabama program. (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. Learn more about how mortgage servicing works.)
Mortgage servicer participation in this program is voluntary. (To find out if your servicer is part of the program, go to the “Resources” page on the Hardest Hit Alabama website.)
The Hardest Hit Alabama program is free and you should not pay for any services associated with applying for assistance.
Homeowners facing a foreclosure should also be on the look out for other scams as well. Signs of a potential scam include:
If you need more information about how foreclosure works in Alabama or want to learn about possible defenses to a foreclosure in your situation, consider talking to a foreclosure attorney. If you want to learn more about alternatives to foreclosure, like a modification or short sale, consider talking to a HUD-approved housing counselor.