Save Your Home From Foreclosure: Hardest Hit Fund Programs

If you live in one of the states (or D.C.) that has a Hardest Hit Fund program, you might be eligible to get money to save your home from foreclosure.

A federal mortgage relief program called the Hardest Hit Fund provided money to 18 states and the District of Columbia to help struggling homeowners avoid foreclosure. The program, which was extended through the year 2020, provides various foreclosure avoidance options to homeowners, like mortgage payment assistance, reinstatement assistance, and transition assistance.

Keep reading to find out if your state offers help to homeowners under the Hardest Hit Fund and find out what kind of assistance might be available to save your home from foreclosure.

Federal Hardest Hit Fund: The Basics

The Hardest Hit Fund is part of the government’s Making Home Affordable (MHA) initiative that began in 2009. While most homeowner relief programs under MHA, like HAMP, are no longer available, many Hardest Hit Fund programs are still around. (The Making Home Affordable Refinance Program is also still available.)

Background Information

In February 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 18 states, plus the District of Columbia. These states (and D.C.) experienced the most extreme home price declinesmore than 20%as well as high unemployment rates, as a result of the economic crisis.

In 2015, Congress committed to provide another $2 billion to the federal Hardest Hit Fund. States have through 2020 to utilize funds allocated under the Fund. (Some states have already closed their programs because their allocated money ran out.)

States With Hardest Hit Fund Programs

The states that received funds and set up Hardest Hit Fund programs are: Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, and Washington D.C.

What Kinds of Programs are Available?

Each state (and D.C.) developed its own programs to help homeowners facing foreclosure. Generally, the programs involve:

  • mortgage payment assistance for unemployed or underemployed homeowners
  • principal reductions to help homeowners get a more affordable mortgage
  • reinstatement assistance, which means the program provides money to bring a delinquent mortgage current with a one-time payment
  • providing money to eliminate homeowners' second lien loans, and
  • providing funds to help homeowners transition into more affordable residences after moving out of their homes.

On May 24, 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155) passed, which allows Hardest Hit Fund states to also use their funds for lead and asbestos removal.

How the State Programs Typically Work

In many of the state programs, the homeowner receives assistance in the form of a 0% interest loan that is paid directly to the servicer (the company that handles the mortgage account). The loan is typically forgivable over a specified time period—meaning the homeowner won’t have to repay it, so long as certain conditions are met—generally at a rate of 20% over five years.

Eligibility Criteria

Eligibility requirements vary widely from state to state and between different state-specific programs, but generally the requirements are as follows:

  • The property must be owner occupied.
  • The homeowner must be unemployed or underemployed, or has gone through a hardship, like a divorce, death of a spouse, or medical hardship.
  • The homeowner’s total annual income must be less than a certain amount.
  • The homeowner has limited financial resources.
  • The unpaid principal balance on the homeowner’s mortgage cannot exceed a certain amount.

Applying for Assistance

To find out how to apply for assistance from a program in your state, go to the U.S. Department of the Treasury’s Hardest Hit Fund webpage. Find the link to your state's program and go there to learn more about available options and how you can submit an application. You can also find application information in our state-specific articles.

Beware of scammer copycat web sites posing as Hardest Hit Fund application sites. The Hardest Hit Fund programs never charge a fee for their services. You don't need to pay anyone to prepare or submit an application for assistance.

For More Information

If you have additional questions about the Hardest Hit Fund, call 888-995-HOPE (4673) to speak with a HUD-approved housing counselor.

The Making Home Affordable website also provides information about the Hardest Hit Fund. You can find links to each of the state programs on the MHA website.

If you need information about how foreclosure works in your state or possible defenses to a foreclosure in your situation, consider talking to a foreclosure attorney.

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