In early 2021, President Joe Biden signed the American Rescue Plan Act into law. This law created a Homeowner Assistance Fund, a federal program, to give $10 billion to the states to help households that are behind on their mortgages and other housing-related expenses due to COVID-19.
Eligible homeowners in Maryland who've experienced a financial hardship because of the pandemic can get a piece of the $248 million allocated to the state from the Homeowner Assistance Fund Loan program or Homeowner Assistance Fund Grant program. These programs help homeowners pay overdue and future mortgage payments and cover other housing-related costs with either a loan or a grant. You might qualify for a loan of up to $30,000 or a grant up to $10,000.
This program provides a one-time payment to reinstate a delinquent mortgage and, in some cases, additional funds to pay for a principal curtailment (a reduction in the loan's principal) or rate reduction to lower your mortgage payments to an affordable level. Generally, servicers will use various methods, like reducing the interest rate, to lower payments by 20%. Also, under program rules, your monthly mortgage payments (principal and interest) must end up being less than 40% of your household gross income.
If you're exiting a forbearance or in default, your servicer will work with you in the process.
To qualify for a Maryland Homeowner Assistance Fund Loan, you must meet the following criteria.
Assistance is structured as a loan, up to $30,000, with a lien recorded on your home. Payments on the loan are deferred for the life of the first mortgage. You have to repay the loan when the first mortgage ends through a repayment, refinance, transfer, or sale. At that time, based on your situation, you'll have to repay the loan:
A Homeowner Assistance Fund Loan may be combined with a Homeowner Assistance Fund Grant.
Grants are given to homeowners who want to avoid imminent displacement (within 90-days) because of, among other things, a tax delinquency, chattel loan or land lease delinquency, homeowners' association fee or condominium association fee delinquency, or mortgage delinquency.
To qualify for a Maryland Homeowner Assistance Fund Grant, you must meet the following criteria.
Assistance is structured as a grant that you don't need to repay. No lien is recorded on the property. The maximum amount you can get is $10,000.
To apply for a loan or grant (or both), go to the Maryland Homeowner Assistance Fund registration page. Or start by answering the prequalification questions. You'll need to provide some documentation with your application, like a current mortgage statement, income information, and identification. For a complete list of the documents you need, go here.
The Maryland Homeowners Assistance Fund programs will continue until the earlier of September 30, 2026, or when all of the funds allotted to the program have been exhausted. If you think you might qualify, it's best to apply as soon as possible.
If you get an unsolicited offer by phone, in the U.S. mail, through email, or by text message offering mortgage relief or foreclosure rescue services, be wary. Scammers are increasingly targeting homeowners who've been affected by COVID-19. The Maryland Homeowners Assistance Fund programs are free. If anyone asks you to pay a fee to get housing counseling or assistance with housing-related costs from these programs, it's a scam.
To learn more about the Maryland Homeowners Assistance Fund programs and eligibility criteria, review the Maryland Homeowner Assistance Fund Factsheet, Maryland Homeowner Assistance Fund Loan Factsheet, and Maryland Homeowner Assistance Fund Grant Factsheet. If you need help with the application process, call the Maryland Homeowner Assistance Hotline at 877-462-7555. You can also get free help from a HUD-approved housing counselor. To find a counselor near you, go to HUD's website or call 800-569-4287.
If you have questions about the foreclosure process in Maryland or want to learn about potential defenses to a foreclosure, consider talking to a foreclosure lawyer.
Effective date: January 6, 2022