HUD Archives: News Releases

HUD No. 10-223
Rhonda Siciliano
(617) 994-8355
For Release
October 5, 2010

32 States and Puerto Rico Will Receive Funds Through HUD's Emergency Homeowners Loan Program

MASSACHUSETTS - U.S. Department of Housing and Urban Development (HUD) Secretary Shaun Donovan
announced today that HUD will provide $61 million to help struggling homeowners in Massachusetts through its Emergency Homeowners Loan Program (EHLP). Secretary Donovan announced the funding available to local homeowners at a press conference with House Financial Services Chairman Barney Frank, Congressman Michael Capuano and Boston Mayor Thomas Menino.

"The Emergency Homeowner Loan Program will provide limited and targeted assistance to help working families get back on their feet and keep their home while they look for work," said Secretary Donovan. "In crafting this new loan program, HUD built on the lessons learned from Treasury's Hardest Hit initiative to design and implement a program
to assist struggling unemployed homeowners avoid preventable foreclosures. Together these two initiatives
represent a combined $8.6 billion investment to help struggling borrowers and in doing so further contribute to the Obama Administration's efforts to stabilize housing markets and communities across the country. We're thankful to Chairman Frank for leading the passage of this funding and to Financial Services Committee members Capuano and Lynch for their strong advocacy and support of this provision."

"People who made responsible decisions about their mortgages and are now having trouble solely because they've
lost their jobs in the recession are the people most deserving of aid," said Chairman Frank. "I'm proud to have
included the funding for the Financial Reform Bill, because without it, Massachusetts residents would not have been eligible for it."

The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama in July, authorizes HUD to administer a $1 billion Emergency Homeowners Loan Program, to provide assistance – for up to
24 months - to homeowners who have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition and are at-risk of foreclosure. HUD will assist borrowers in
32 states and Puerto Rico not otherwise funded by Treasury's Hardest Hit Housing Fund program, based on the
state's relative share of unemployed homeowners. It is HUD's intention for the program to begin taking applications from eligible homeowners by the end of the year.

"So much of what we do these days around foreclosure is about the aftermath. But this new Emergency
Homeowners Loan Program is focused on foreclosure prevention - on keeping people in their homes, on keeping neighborhoods vibrant, on keeping cities strong. This is important funding that is going to make a difference in people's lives," said Mayor Thomas M. Menino. "I want to thank Congressman Frank, Secretary Donovan, and the Obama Administration for their partnership on this issue. I look forward to working together to strengthen the
housing market and reduce foreclosures."

Who Will Be Helped
The program will complement existing Administration efforts to assist struggling homeowners - including the Home Affordable Modification and Hardest Hit Fund initiative administered by the U.S. Treasury Department. Under the

  1. the borrower must be at least three month delinquent in their payments and have a reasonable likelihood
    of being able to resume repayment of their mortgage payments and related housing expenses within two
  2. the property must be the principle residence of the borrower, and eligible borrowers may not own a second
  3. the borrower must have suffered at least a 15 percent reduction in income and have been able to afford
    their mortgage payments prior to the event that triggered the loss income.

How They Will Be Helped
The HUD Emergency Homeowners Loan Program will offer a forgivable, deferred payment "bridge loan" (zero percent interest, non-recourse, subordinate loans) for up to $50,000 to assist eligible borrowers with their mortgage arrearages and payments on their for mortgage principal, interest, mortgage insurance premiums, taxes and hazard insurance for up to 24 months.

There will be a dual delivery approach for program administration. The first approach will delegate some of the program's administrative functions to a designated third party. The second approach will enable state housing
finance agencies (HFAs) that operate substantially similar programs to engage in relief efforts on behalf of residents
of their state:

  • Delegated approach: HUD will delegate key program administration functions to NeighborWorks® America - an experienced and highly regarded national network of affiliated housing counseling agencies. Under the program, nonprofit housing counselors who are part of the National Foreclosure Mitigation Counseling Program administered by NeighborWorks® America will coordinate intake counseling, document preparation and outreach functions. HUD will also use it delegation authority to contract with an experienced entity to provide loan servicing and fiscal control functions such as collecting payments from homeowners, distributing payments to servicers, and managing loan balances.

  • Substantially similar state law approach: State HFAs that operate loan assistance programs that are determined by HUD to be substantially similar to the EHLP will receive allocations to fund emergency loans for borrowers in their states as well as payments to cover the administrative costs of performing the intake and housing counseling and fiscal agent functions (described above) directly or indirectly through subcontracts with third parties.


HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet and


Content Archived: July 24, 2012