HUD Archives: News Releases

Brian Sullivan
(215) 708-0685
For Release
October 5, 2010


BALTIMORE - The U.S. Department of Housing and Urban Development today announced today that it will provide nearly $40 million to help struggling homeowners in Maryland stay in their homes. Funded through HUD's new Emergency Homeowners Loan Program (EHLP), Maryland families experiencing unemployment or a reduction in
income can receive a zero-percent loan to help them pay their mortgage. HUD Assistant Secretary for
Housing/ Federal Housing Commissioner David H. Stevens made the announcement at the 2010 Governor's
Conference on Housing and Sustainable Communities in Baltimore.

FHA Commissioner David H. Stevens

Signed into law by President Obama in July, the Dodd-Frank Wall Street Reform and Consumer Protection Act authorizes HUD to administer a $1 billion Emergency Homeowners Loan Program nationwide. EHLP provides up to 24 months of assistance 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.

"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 Stevens. "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."

Maryland Governor Martin O'Malley added, "Even as we move beyond the fallout of the subprime mortgage and predatory lending crisis, I know that there are still too many families in our state struggling to get by. This program strengthens an important safety net for hard-working people and protects the investment they made in the
American dream."

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. Borrowers must be at least three months 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 home; and

  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 Families Will Be Helped

HUD's Emergency Homeowners Loan Program will offer up to $50,000 in a forgivable, deferred payment "bridge
loan" (zero percent interest, non-recourse, subordinate loans) 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: June 27, 2012