The North Carolina Foreclosure Prevention Fund

North Carolina's Hardest Hit Fund program provides assistance to homeowners who are struggling to make their mortgage payments due to job loss or other temporary financial hardship.

In 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, North Carolina received over $482 million to provide assistance to homeowners who are struggling to make their mortgage payments due to job loss or other temporary financial hardship. Additional funding was approved in 2016.

Read on to learn about the different types of help available through North Carolina’s Hardest Hit Fund program, called the N.C. Foreclosure Prevention Fund, and find out if you may be eligible for assistance. (To learn more about the Hardest Hit Fund and the various state programs funded by it, visit our Hardest Hit Fund topic page.)

The N.C. Foreclosure Prevention Fund

The N.C. Foreclosure Prevention Fund has several programs to assist homeowners who lost jobs or experienced reductions in income through no fault of their own. The programs are:

  • The mortgage payment program, which provides up to $36,000 to pay the monthly mortgage payment for as many as 36 months. (You can also get one-time assistance to catch up on missed payments.)
  • The loan recast program helps those who are already re-employed (or have secured a fixed income) after an eligible hardship, but who are earning less and therefore unable to make mortgage payments. You may qualify to have the principal balance of your outstanding mortgage reduced and the loan recast so that your payments are more affordable.
  • The second mortgage refinance program, which provides up to $50,000 to pay off a homeowner’s second mortgage.

How the  N.C. Foreclosure Prevention Fund  Works

Assistance is provided in the form of a 0% interest, forgivable loan secured by a junior lien that is recorded against your property. After five years, the loan is then forgiven at 20% per year. After ten years, the lien will be released.

You only need to repay the loan if:

  • you move out
  • you sell the property and the sale proceeds will cover the repayment, or
  • you refinance to consolidate debt or take cash out. (You do not have to repay the loan if you are refinancing simply to get better loan terms.)

Borrower Eligibility

To be eligible for the N.C. Foreclosure Prevention Fund programs, you must meet all of the below criteria.

  • You are a legal U.S. resident.
  • You own the home.
  • You occupy the home as your primary residence.
  • You have lost your job or experienced a reduction in income through no fault of your own,  or  are facing a temporary financial hardship such as a divorce, serious illness, or death of a co-signer and must find new employment.
  • You lost your job or your temporary financial hardship occurred or you were honorably discharged from the military after January 1, 2008.
  • You mortgage payment history was good prior to your recent unemployment, income loss, or financial hardship.
  • You will be able to resume your mortgage payments after assistance ends.

Home Eligibility Criteria

Additionally, your existing mortgage and the property securing the mortgage must meet the below criteria.

  • The property is located in North Carolina.
  • You currently owe $300,000 or less on all your mortgages.
  • The home is a single-family home, townhome, or condominium (attached or detached). Manufactured homes are eligible if on a permanently affixed foundation on land owned by the homeowner. Learn more about  what happens if you are struggling to pay your mobile home loan.

Program Exclusion

You are not eligible for assistance from the N.C. Foreclosure Prevention Fund if you have been convicted of a mortgage-related felony including larceny, theft, fraud, forgery, money laundering, or tax evasion, within the last ten years.

Servicer Participation

Program payments are made directly to the mortgage servicer whose participation in this program is voluntary. (A mortgage servicer is the company that collects monthly mortgage payments from borrowers on behalf of the owner of the loan, as well as tracks account balances, manages the escrow account, handles loss mitigation applications, and pursues foreclosure in the case of defaulted loans.)

How to Apply

Go to, then click on “Am I Eligible to Apply?” and then choose the link “Find Out if You Are Eligible For Help From the N.C. Foreclosure Prevention Fund” to complete an initial eligibility questionnaire.

If you are eligible for the program, you can either:

  • apply online (go back to, then “What We Offer” and click on “How the Process Works” for detailed instructions), or
  • can contact a participating HUD-approved housing counselor in your area that will help you complete the application. (To find a counselor, go to, then “How Do I Get Help?” and “Contact a housing counselor.”)

Funds Are Still Available

In April 2016, the N.C. Foreclosure Prevention Fund received an additional $224 million in funding. Assistance is provided on a first-come, first-served basis and the program is scheduled to last through 2020.

For More Information

To learn more about the N.C. Foreclosure Prevention Fund program, call 888-623-8631.

If you are facing foreclosure for any reason (not necessarily related to your employment situation), you can call 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. (Learn more about the  North Carolina foreclosure process.)

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