Foreclosure Prevention Program in Kentucky

If you’re having trouble making your mortgage payments in Kentucky, the state’s Unemployment Bridge Program might be able to help you avoid a foreclosure.

If you’re facing a foreclosure in Kentucky, you might be eligible to receive money from the state’s Unemployment Bridge Program, funded through the federal Hardest Hit Fund. This program gives mortgage payment assistance to unemployed and underemployed homeowners, as well as those who have a long-term or permanent disability.

Keep reading to get an overview of the program, learn how much assistance is available, and find out if you’re potentially eligible.

Hardest Hit Fund: Providing Help to Homeowners

In 2010, the U.S. Department of the Treasury created the Hardest Hit Fund to give aid to homeowners in those states most affected by the foreclosure crisis. As part of this program, the government allocated $7.6 billion to 18 states, including Kentucky, 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 federal Hardest Hit Fund.)

Initially, Kentucky received $148 million in funds through the Hardest Hit Fund to help eligible homeowners avoid foreclosure. More funding came through in 2016.

To help homeowners save their home from foreclosure, Kentucky set up the Unemployment Bridge Program. (To learn about foreclosure procedures in Kentucky, see our Summary of Kentucky’s Foreclosure Laws.)

Kentucky’s Foreclosure Prevention Program

Under Kentucky’s “Unemployment Bridge Program,” eligible unemployed and underemployed homeowners—or people who have a qualifying disability—who’ve fallen behind in their mortgage payments can get up to $15,000 to reinstate (get current on) a delinquent loan and cover future mortgage payments.

The program will pay the overdue amount—including late fees, interest, taxes, insurance, and costs—and pay for up to 12 months of future mortgage payments. If the entire $15,000 goes towards catching up on the loan, you won’t qualify for help with your monthly mortgage payment going forward. But if you don't use the full amount to reinstate, any remaining amount may be put towards monthly mortgage payments for as many as 12 months or until you reach the maximum assistance amount.

How the Program Works

The Unemployment Bridge Program provides assistance in the form of a 0% interest, forgivable loan secured by a junior lien that is recorded against the property. You need to repay the loan only if:

  • you sell the property before the forgiveness period expires and there are sufficient proceeds from the sale after paying all superior secured loans
  • you refinance to consolidate debt or take cash out, or
  • in cases of fraud.

Borrower Eligibility

To qualify for the Unemployment Bridge Program, you must meet one of the following criteria.

  • You experienced a job loss or reduction in income through no fault of your own within the three-year period before your application date.
  • You suffered a qualifying long-term or permanent disability after the date of the mortgage loan.

Also, all applicants have to show they need assistance by having at least a 15% reduction in current income as compared to previous income.

Other Eligibility Criteria

Additionally, you, your existing mortgages, and your savings must meet the below criteria.

  • You have to be a resident of Kentucky.
  • You have to live in the property as your primary residence.
  • The total amount of the liens on the property can’t be more than $275,000.
  • You can’t have more than two mortgage liens on the property.
  • Your liquid reserves can’t be more than six months’ worth of PITI (principal, interest, taxes, and insurance), excluding retirement funds.
  • The servicer of your loan must be enrolled in the program as a participating servicer. (To find out if your servicer is part of the program, as well as full details about how to qualify for assistance, go to the "Servicers" page of the Kentucky Homeownership Protection Center’s website.)


You’re not eligible for assistance if one of the below conditions applies to you.

  • You were convicted of a mortgage-related felony, including larceny, theft, fraud, forgery, money laundering, or tax evasion, within the last ten years.
  • You have a seller-financed mortgage.
  • You filed bankruptcy, and the bankruptcy is active.

How to Apply for the Program

To apply for assistance from the Unemployment Bridge Program, go to the Kentucky Homeownership Protection Center’s website and click on “Get Free Help” to complete an intake form.

You can also apply by calling 866-830-7868.

When the Program Ends

The Unemployment Bridge Program is scheduled to stop taking applications after July 31, 2018.

Beware of Scammer Websites

There are a number of scammer websites on the Internet purporting to be Hardest Hit Fund application sites. The Kentucky Housing Corporation is the only agency authorized to administer the Unemployment Bridge Program.

The program is free, and you should not pay for any services associated with applying for assistance.

More Information

Go to the Kentucky Homeownership Protection Center’s website and click on “Unemployment Bridge Program” or call 866-830-7868 for more information. Free foreclosure counseling is also available from the program.

For information about Kentucky foreclosure procedures or to find out about possible defenses to a foreclosure, consider talking to a local foreclosure attorney. If you want to learn about different ways to avoid a foreclosure, like with a loan modification, talk to a HUD-approved housing counselor. (Learn about using a HUD-approved housing counselor.)

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