Foreclosure Prevention Program in Oregon

Do you need help avoiding a foreclosure in Oregon? You might qualify for financial assistance from the state’s Hardest Hit Fund program.

The Oregon Homeownership Stabilization Initiative (OHSI), which is part of the federal Hardest Hit Fund, provides foreclosure avoidance assistance to eligible homeowners. If you qualify for the program, you can get money to:

  • make your mortgage payments
  • reinstate a delinquent loan
  • get caught up on past-due property taxes, or
  • pay overdue reverse mortgage charges, like taxes, insurance, and homeowners’ association dues.

You might also be able to sell your underwater home in a short sale and then re-purchase the property at its current value.

To learn more about each of these programs, find out how much monetary assistance is available, and get information about how to apply, read on.

Overview of the Federal Hardest Hit Fund

The U.S. Department of the Treasury set up the Hardest Hit Fund in 2010 to provide funding to the states that were hit hardest by the foreclosure crisis. As part of this program, $7.6 billion in aid was allocated to 18 states, including Oregon, as well as Washington D.C., which suffered extreme home price declines and high unemployment rates due to the recession. (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.)

Oregon initially received over $220 million and additional funding was approved in 2016. With funds from the federal Hardest Hit Fund, the state started the OHSI program.

Oregon Homeownership Stabilization Initiative (OHSI)

OHSI offers the following forms of financial assistance to help eligible homeowners avoid foreclosure.

Payment and Reinstatement Assistance

The Home Rescue program gives eligible homeowners money to make their mortgage payments or get caught up on overdue payments.

  • Mortgage payment assistance. The program pays for as many as 12 months of an eligible homeowner's mortgage payments, up to $20,000.
  • Reinstatement assistance. If the homeowner is behind in payments, the program provides up to $10,000 to bring the loan current.

Sell Your Underwater Home in a Short Sale and Buy it Back

The Loan Refinancing Assistance Pilot Project (LRAPP) program purchases underwater homes (“underwater” means you owe more than the home is worth) in Crook, Deschutes, Jackson, Jefferson, and Josephine counties through a short sale and then resells the property back to the owner at its current value.

Get Caught Up: Overdue Mortgage Payments, Property Taxes, or Reverse Mortgage Charges

The Loan Preservation Assistance (LPA) program has three subprograms:

  • Preservation Benefit program. This program provides up to $40,000 to homeowners who can afford their mortgage payments, but have fallen behind on their first mortgage because of a financial hardship.
  • Property Tax Benefit program. This program provides money to eligible homeowners who own their homes outright—that is, the home isn’t subject to any mortgage liens—and have fallen behind on their county property taxes due to a hardship. To qualify, you must be able to afford the taxes going forward. This program provides up to $40,000 directly to the county tax authority to bring the property taxes current. (Read about what happens if you don’t pay your property taxes.)
  • Reverse Mortgage Benefit program. This program provides up to $40,000 to eligible homeowners who have a reverse mortgage—specifically, a Home Equity Conversion Mortgage (HECM)—to get current on any property taxes, insurance, and homeowners’ association fees that the lender paid.

How Assistance Works

OHSI assistance is generally provided in the form of a no-interest, forgivable loan. The loan is forgiven at a rate of 20% each year for five years.

You might have to repay the loan if you sell or refinance the property before the loan is fully forgiven, and if you have sufficient equity in the property.

Eligibility for Assistance and How to Apply

The eligibility requirements for each OHSI program vary. To find out the specific requirements and exclusions for the different programs, as well as submit an application, go to the Oregon Homeownership Stabilization Initiative website, hover over “Programs,” and select the program you’re interested in. Then, click on the button “Eligibility Questionnaire/Apply.”

You can also read about eligibility criteria in OHSI's FAQs and find other program information. Programs change frequently so be sure to check the website for the latest information.

Getting Help

If you need information about the Oregon foreclosure process 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, like loan modifications, short sales, and deeds in lieu of foreclosure, consider talking to a HUD-approved housing counselor.

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