North Carolina’s Hardest Hit Fund program, which is called the N.C. Foreclosure Prevention Fund, provides money to eligible veterans so they can make their mortgage payments and avoid a foreclosure.
If you qualify for financial assistance from the fund, the program will make your mortgage payments—and pay related expenses—while you look for employment or complete job training for as long as three years. Eligible recipients can get a maximum amount of $36,000.
To learn more about this program and find out if you might qualify, read on. (If you’re currently in the military and want to learn about North Carolina laws that could help prevent a foreclosure, see Foreclosure Protections for Military Servicemembers Under North Carolina Law.)
The Hardest Hit Fund is a federal program that the U.S. Department of the Treasury established in 2010. The purpose of the fund was to give money to various states that were severely impacted by the foreclosure crisis that started around 2009. As part of this program, the government allocated $7.6 billion in aid to 18 states, including North Carolina, along with Washington D.C., which suffered significant home price declines and high unemployment rates because of the economic downturn.
The various states, and D.C., used the money to set up local foreclosure prevention programs. With the funding, North Carolina set up the N.C. Foreclosure Prevention Fund.
One program under the N.C. Foreclosure Prevention Fund is called "Mortgage Payment Help for Military Veterans." This program provides 0% interest, forgivable loans of up to $36,000 to cover a veteran’s home mortgage and related expenses for up to three years (36 months) while searching for or training for a new job.
If you’re enrolled in vocational rehab—or you’re using another eligible VA program or benefit, like the GI Bill—you can get financial assistance for 36 months unless you find a job earlier.
You don’t have to be behind on your mortgage payments to apply for help from the program; though you must meet specific eligibility criteria, like you were honorably discharged from the military after January 1, 2008. For a complete list of requirements, check the N.C. Foreclosure Prevention Fund’s eligibility website.
To apply, call 888-623-8631, contact a HUD-approved housing counselor, or go to the N.C. Foreclosure Prevention Fund website. If you have a foreclosure sale date within the next 30 days, you must apply in person with a counselor. (Learn about the North Carolina foreclosure process.)
You’ll have to provide:
After you apply and the program confirms that you’re eligible, the N.C. Housing Finance Agency (the program administrator) might place a temporary stay (a hold) on your foreclosure proceedings for up to 120 days. During this time, the bank that owns your loan and the servicer can’t foreclose or take other legal action while your loan application is under review.
The program pays the money directly to your loan provider or bank and, again, is in the form of a no-interest, forgivable loan. If you live in the home for ten years, the loan is forgiven, and you won’t have to pay it back.
Here's how the forgiveness program works: After five years, the loan is reduced by 20% each year until you don’t owe anything. But you have to repay the loan if you sell or refinance the home in the first five years, and the sale proceeds are sufficient to repay the debt.
The states, including North Carolina, which received Hardest Hit money have until the end of 2020 to use the funding. Though, some programs have ended early because their money ran out. (Learn about other available programs for homeowners in North Carolina who’re struggling to avoid foreclosure.)
So, if you think you might be eligible for financial assistance from North Carolina's program and you’re trying to avoid a foreclosure, you should submit your application as soon as possible.
If you’re facing a foreclosure in North Carolina and have received a 45-day preforeclosure notice, consider calling the State Home Foreclosure Prevention Project at 888-442-8188. This program offers free assistance to homeowners, like counseling, help in talking to your servicer, and, in some cases, access to legal services.
If you need detailed information about the foreclosure process in North Carolina or want to learn about possible defenses and options in your situation, consider talking to a foreclosure attorney.
If you want to learn more about different alternatives to foreclosure, including loan modifications, short sales, and deeds in lieu of foreclosure, make an appointment to talk with a HUD-approved housing counselor.