Unemployed homeowners were previously able to qualify for certain mortgage assistance programs, like home loan modifications, if they were receiving income from unemployment benefits. However, changes in certain rules have no longer allowed jobless individuals to claim these benefits as income, which has shut the door on some modification opportunities for the unemployed. Yet, forbearance options from the federal Home Affordable Unemployment Program may be available to jobless homeowners in certain cases, and state-specific unemployment mortgage assistance programs have also been implemented as a way to prevent foreclosure in cases where a homeowner may have lost their job.
The Making Home Affordable Program implemented an unemployment program which was hoped to provide foreclosure prevention assistance to homeowners who had lost their job and were facing the possibility of defaulting on their mortgage. While this unemployment program simply offers homeowners the opportunity to receive forbearance on their mortgage payments, there are mixed feelings about this type of unemployment mortgage assistance. There are some who feel they can be greatly beneficial as forbearance gives homeowners at least three additional months to either find a job or another source of income, but there are those who believe that offering a forbearance to an unemployed homeowner will simply delay the inevitable.
Yet, there are some state-specific programs which had been set in place to help homeowners who have lost their job as well. An example of one of these foreclosure prevention programs for the unemployed comes from the North Carolina Foreclosure Prevention Fund, which offers loans at 0% interest to certain homeowners who are seeking an employment opportunity. These loans can be made available to homeowners in the amount of $24,000, or up to 24 months, or $36,000 or 36 months to homeowners in a particularly hard hit area. Funds from these loans will be used to make a homeowner’s mortgage payment and, if a homeowner remains in their home for 10 years, the loan will be forgiven.
While this particular state unemployment assistance program may not be available in all areas, there are numerous state housing agencies which have implemented programs to address unemployment thanks to funds provided by the Hardest Hit Program. Understandably, not all foreclosure prevention programs which are set to address unemployment may be helpful to every homeowner, but these options from the Making Home Affordable Program and state housing agencies are hoped to bring more solutions to unemployed homeowners over the coming months so that additional foreclosures may be prevented while the job market slowly recovers.