The Michigan State Housing Development Authority has received approval for a plan to distribute $154 million in federal funds to Michigan homeowners to help them avoid foreclosure and the program will begin qualifying homeowners and distributing funds on July 12. The Detroit Free Press reports on what is available and who is eligible for the help:
State officials say they’ll tell borrowers within 48 hours if they qualify for one of the program’s three options:
• Mortgage payment assistance for homeowners now receiving unemployment compensation. The state would provide half of the monthly mortgage payment up to $750 a month for a maximum of 12 months.
• Rescue funds for homeowners who have fallen behind on their mortgage payments because of a temporary layoff or medical emergency and have overcome this obstacle. The state will provide up to $5,000 to families in this situation.
• Federal matching funds for principal reductions for homeowners who can no longer afford their mortgage payments as a result of reduced income. This will allow up to a $10,000 principal reduction from the state that will be matched by the lender.
Michigan is one of five states to get this extra help from the federal government due to its disproportionate number of foreclosures, and is the first of those states to get their distribution program approved.