HUD DEPUTY SECRETARY RON SIMS ANNOUNCES ADDITIONAL SUPPORT TO HELP PENNSYLVANIA HOMEOWNERS STRUGGLING WITH UNEMPLOYMENT
32 States and Puerto Rico Will Receive Funds Through HUD's Emergency Homeowners Loan Program

PHILADELPHIA - U.S. Department of Housing and Urban Development (HUD) Deputy Secretary Ron Sims announced today that HUD will provide $105,804,905 to help struggling homeowners in Pennsylvania through its Emergency Homeowners Loan Program (EHLP). Sims and Congressman Chaka Fattah (D-PA) made the announcement at Mt. Airy, USA, which is a nonprofit community development organization that provides housing counseling, in Philadelphia.

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.

"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 Sims. "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."

Sims and Fattah showcased the efforts of Mt. Airy, USA to help struggling homeowners under Pennsylvania's Homeowner's Emergency Mortgage Assistance Program (HEMAP).

"Millions of American homeowners, through no fault of their own, have lost their jobs in the current economic downturn and have faced the loss of their piece of the American Dream," said Fattah. "HEMAP is a proven success
in Pennsylvania and now we will show that it will work nationally. It will keep families in their homes, providing emergency relief from foreclosure for those with a proven history for working and paying their mortgage."

"The new Wall Street reform law includes the most sweeping financial reforms since the Great Depression which will better protect each and every American," said Congressman Paul E. Kanjorski (PA-11). "I strongly advocated for the creation of a home foreclosure prevention program nationwide based on Pennsylvania's initiative. Since 1983, HEMAP has saved 43,000 Pennsylvania homes from foreclosure and I am incredibly proud that this program is the basis for a similar national program. As a result of the funding announced today, even more Pennsylvania families will be able to receive the help they need during these difficult economic times."

U.S. Senator Robert P. Casey, Jr. (D-PA) says the EHLP program will build on the success of HEMAP and help many more people stay in their homes.

"Thousands of Americans bought homes they could afford, but due to an economic recession and widespread unemployment beyond their control, they are no longer able to keep up with their monthly mortgage payments," said Casey. "This funding will help Pennsylvania organizations and advocates scale up programs that have proven successful in keeping their families in their homes."

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
EHLP:

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 years.
2. the property must be the principle residence of the borrower, and eligible borrowers may not own a second
   home.
3. the borrower must have suffered at least a 15 percent reduction in income and 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, non-profit 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 its 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.

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HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development ad enforces the nation's
fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.