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posted: 7/8/2011 12:01 AM

About Real Estate: New government loan program can help stave foreclosure, but homeowners must act quickly

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The Emergency Homeowners' Loan Program can provide up to $50,000 to financially troubled Americans, but the deadline to ask for the money is approaching soon.

Q. I heard that the federal government recently launched a new program aimed at helping unemployed people keep their homes. What are the details?

A. The long-awaited plan, called the Emergency Homeowners' Loan Program, is aimed at helping out-of-work owners avoid foreclosure by providing zero-interest loans of up to $50,000 to meet their mortgage payments until they get back on their financial feet.

The new plan, commonly referred to as EHLP, could help many unemployed folks across the nation save their homes. But there's a very, very big catch: Owners have fewer than three weeks from now to apply to be eligible for the program.

I'm devoting this entire column to answering some common questions about the new plan.

Q. Why do people who want help from EHLP have such a short time frame to apply?

A. The program was supposed to begin last year, but implementation was delayed by technical issues and political bickering. So, it wasn't officially launched until late June.

As a result of the delay, homeowners now have only until July 22 to apply so their request can be processed by Sept. 30 -- the date that the government's authority to issue new loans expires.

Q. What does the EHLP offer?

A. It can provide eligible homeowners with a no-interest loan of up to $50,000 to pay past-due mortgage bills, including monthly insurance and tax requirements, and to cover a portion of their future payments for up to two years. And if certain requirements are met, the money never has to be repaid.

Q. Do I have to be in foreclosure to get EHLP aid?

A. No, but you must be at least 90 days delinquent on your home loan. You also must present a "breach letter" or similar document from your lender or loan servicer showing that you are behind on your payments.

Q. I still have a job, but my hours were cut to 20 hours a week from the 40-plus I used to work a few years ago. My reduced paycheck has made me unable to make my mortgage payments on time. Can I qualify for help from EHLP, even though I am working part time?

A. Yes. The federal program is not only open to those who are "temporarily and involuntarily" unemployed due to layoffs or a medical condition, but also to those who are "underemployed." This means that people like you -- who still have a job but are having financial difficulties because their work hours or pay has been slashed -- also qualify for help.

You would not be eligible, however, if you quit your job or asked for a reduction in your work hours.

Q: I am up-to-date on my own home's payments, but I am delinquent on the mortgage for the rental property that I own because the tenant moved out and the property is still vacant. Can I get help through EHLP for my rental investment?

A: Sorry, but the answer is no. The money is offered only to people who are struggling to keep their personal residence: It isn't offered to rental-property investors or those who own a second home or vacation getaway.

Q: Is the EHLP program available in all 50 states?

A: Funds from the EHLP are available in more than 30 states. Other states, most of which have experienced an even larger drop in home values and sharper rise in foreclosures, qualify for federal funds under the U.S. Treasury Department's separate "Hardest Hit Housing Market Program" -- a plan that often can provide financially troubled homeowners with even more comprehensive help than EHLP.

Q: How can I get more details?

A: You need to contact a government-certified housing counselor near you by calling EHLP's toll-free national hotline, 855-346-3345, or by visiting There's no charge for the services.

The counselor will tell you whether you qualify for EHLP, or funds from the larger Hardest Hit Market Program. The counselor also will help you fill out the relatively simple forms that are necessary in order to apply for the financial aid.

Remember, though, that you need to act fast: The July 22 deadline to request help through the Emergency Homeowners' Loan Program is just around the corner.

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