Although the economy has recovered substantially since the 2008 recession, the effect on home values has been mixed. Some have appreciated in value so that homeowners are no longer under water on their mortgages, but that’s not true for everyone. For those whose homes haven’t recovered from the real estate crash, and are a minimum of 110% under water, there’s a federal assistance program available if certain criteria are met.
The new I-Refi program offers up to $50,000 in federal assistance through the Hardest Hit Fund (HHF), which helps pay down a mortgage balance, and refinances it into an affordable loan. To qualify, homeowners must be current on their mortgage payments for the past 12 months, and must meet IHDA’s income and credit requirements.
Home State Bank is helping homeowners find out if they qualify; the first step involves a professional home appraisal. “If homeowners meet income, credit score criteria, and home price limits, they can receive, up to $50,000, what’s needed to bring their mortgage balance to between 90% - 97% of the property’s current value,” said David Thomsen, Sales Manager of Home State Bank’s Mortgage Division.
If qualifications are met, it proceeds like a regular refinance process. “The new loan pays off the old mortgage, and includes a 3-year forgivable grant in the amount necessary to get the mortgage down to 90% - 97% of the property’s value,” said Thomsen. “If the homeowner has to sell within three years, the amount due back is prorated based on the amount of time passed.”
The program is first come, first served. “There’s no time limit on the program,” said Thomsen, adding, “But once the funds are used up, they’re gone. If a homeowner previously received HHF assistance, they’re still eligible to apply for the I-Refi program and could receive an additional $35,000 for a total of $85,000 to eligible borrowers.” For more information, please contact:
David Thomsen, Sales Manager / Mortgage Division