North Carolina’s Hardest Hit Fund program—the N.C. Foreclosure Prevention Fund—provides financial support to homeowners who meet eligibility criteria so they can save their home from foreclosure. If you qualify for the program, you can get money to make your mortgage payments or reduce the principal balance of your loan.
If you think you qualify for assistance, you'll need to act quickly. Because limited funds are available, the N.C. Foreclosure Prevention Fund will stop accepting applications after July 31, 2019.
The U.S. Department of the Treasury established the federal Hardest Hit Fund in 2010 to give money to various states that were severely impacted by the foreclosure crisis happening at that time. 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.
With the funding, North Carolina set up the N.C. Foreclosure Prevention Fund.
The N.C. Foreclosure Prevention Fund offers two kinds of assistance to help homeowners prevent a foreclosure.
This program provides up to $36,000 to cover your mortgage payment and related expenses for up to 36 months while you search for or train for a new job.
Money is provided in one of three ways:
To qualify, you must be delinquent on your loan, at risk of falling behind on your payments, or in foreclosure.
This program provides money to homeowners to reduce the principal balance of their outstanding mortgage balance. The loan is then recast so that the payments are more affordable.
In addition to meeting other requirements, you must demonstrate a need for assistance by having a current housing payment that’s more than 25% of your household income.
To be eligible for the N.C. Foreclosure Prevention Fund programs, you must meet certain criteria.
You’re not eligible for assistance from the N.C. Foreclosure Prevention Fund if you’ve been convicted of a felony connected with a mortgage or real estate transaction including larceny, arson, theft, fraud, forgery, money laundering, or tax evasion.
Keep in mind that eligibility criteria can change. For the latest requirements, check the N.C. Foreclosure Prevention Fund’s eligibility website.
Assistance is in the form of a zero-percent interest, forgivable loan. If you stay at the property for ten years, the loan is forgiven, which means you don’t have to pay it back.
Here's how the forgiveness plan 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 that received Hardest Hit money have until the end of 2020 to use their funding. Some programs, including those in North Carolina, are closing early because the allotted money is running out. 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 apply for help as soon as possible. The last day you can submit a completed application is July 31, 2019.
To learn more about the N.C. Foreclosure Prevention Fund program, call 888-623-8631 or visit the N.C. Foreclosure Prevention Fund website.
Also, if you’re facing foreclosure, consider calling the State Home Foreclosure Prevention Project at 888-442-8188. This program offers free help, including counseling, assistance in dealing with your servicer, and, in some cases, access to legal services.
If you need information about the foreclosure process in North Carolina 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 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.