New Program for Struggling Michigan Homeowners

Michigan has been, by far, one of the hardest hit states during the housing crisis of the past several years. Rampant foreclosures left many Michigan residents scrambling to find housing amid an economy thin on jobs and heavy on unemployment. To combat these financial obstacles, the Michigan State Housing Development Authority (MSHDA) began offering a variety of programs to assist homeowners who were struggling with their mortgages for a variety of reasons from unemployment to overwhelming medical bills. On July 9th, Gary Heidel, executive director of the MSHDA, announced a new Modification Program to help underemployed homeowners in addition to revisions made to the Michigan's Hardest Hit Funds programs.

The new Modification Plan is designed to help homeowners who are struggling with their monthly payments. The maximum reservation for the program is $20,000 and the funds go to the lender for the delinquent amount so that the lender can modify the mortgage and reduce the owner's monthly payments. Homeowners who have a delinquent second mortgage can also take advantage of the program if their first mortgage is current.

In addition to the new Modification Program, Michigan residents have access to several other plans designed to help homeowners prevent foreclosure. These include the Unemployment Mortgage Subsidiary Program, the Mortgage Loan Rescue Program and the Principal Curtailment Program.

The Unemployment Mortgage Subsidiary Program: This plan makes payments directly to the lender in upwards of $1,000 or 50% of the owner's monthly payments for a period of 12 months.

Mortgage Loan Rescue Program: Designed to assist homeowners who are delinquent on their mortgage, this program pays funds directly to the lender to help the homeowner avoid foreclosure. The maximum allowance has recently been increased to $20,000.

Principal Curtailment Program: This program assists homeowners who have a mortgage principal that is higher than the home is worth and are also struggling to make their monthly payments. Homeowners can qualify for up to $10,000 in assistance, which is paid directly to the lender, but the lender must match the total assistance amount and reduce the principal accordingly. The total reduction helps the owner with more manageable payments while also decreasing the total amount owed on their home.

You can learn more about Michigan's variety of homeowner assistance programs at the MSHDA website. If you're buying or selling a home in the East Lansing or Greater Lansing areas of Michigan, please contact me at MyRealtorRob. In addition to providing a free market analysis, I can assist you in securing financing and finding the best loan option for your current needs.