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MORTGAGE ASSISTANCE UNEMPLOYED UNDEREMPLOYED REINSTATEMENT ONLY
Program Goal To bridge eligible applicants across a period of unemployment and allow them to stay current on their mortgage. To bridge eligible applicant’s across a period of underemployment and allow them to stay current on their mortgage. To bring eligible applicants current after a brief interruption or reduction in income.
Eligible Applicant One or more applicants must be currently receiving unemployment, be eligible to receive unemployment or have exhausted unemployment compensation benefits. Applicant that can show a reduction in income by 15% or more since the hardship event. (Base pay is defined as hourly wage or shift pay. Commissioned applicant’s will be treated as self-employed. )
* ACTIVE MILITARY - Any reduction in income
Applicant facing foreclosure due to circumstance beyond his control but has now regained employment. Mortgage debt-to-income ratio must be below 35% or below.
Ineligible Applicant • Active Bankruptcy (must be discharged to be eligible)
• Disabled & permanently unable to work
• Temporary/Seasonal Employment
• Part-Time Employment (unless eligible for UI)
• Catastrophic medical expenses
• Self-infl
icted financial hardship and/or poor debt management, stripping the equity from their home for non-essential purpose, or overall mismanagement of their personal budget.
• Foreclosure sale date has been issued by the courts.
• An individual may only receive assistance ONE time. If an individual listed on a mortgage receives assistance for a property, no other individual listed on the mortgage may receive assistance for the same property.
SAME SAME
Structure of Assistance Nonrecourse zero-percent interest, non-amortizing, forgivable loan secured by a subordinate lien on the subject property. Forgiven over a five (5) year period at a rate of 20% per year. If the property is sold or refinanced prior to the loan termination date, funds will be recovered should sufficient equity be available from the transaction. SAME SAME
Length of Assistance 24 months – Non-education option
36 months – Education option in non-distressed county
42 months – Education option in distressed county
SAME One-time Payment per applicant household
Maximum Assistance Up to $50,000 to include 24 onths of assistance. MHC will allow up to 6 months prior to hardship to be included within the $50,000 maximum amount. SAME Up to $50,000
Age of Documents Must be current and dated within 60 days of approval. SAME SAME
Appraisal / Determination of Value Not required SAME SAME
Assets No limitation on assets SAME SAME
Bankruptcy Bankruptcy must be discharged or dismissed. SAME SAME
Eligible Existing Mortgage 1st mortgage payments Only (Secured by Deed of Trust)
• Fixed rate
• Fixed term
• Balloon term
• ARM
• Fully amortizing
• Unpaid principal balance cannot exceed $271,000
• Home Equity Line of Credit – closed to future advances
SAME SAME
Ineligible Existing Mortgage • Second Mortgage Loans
• Chattel Mortgages without Deed of Trust
• Interest Only loans
• Negative amortizing loan
• Open End Mortgage / Future Advance Clause
• Loan held by non-participating servicer
• Seller Financed
• Contract for Deed • Lease with Option to Purchase
• Bond for Title
• Home Equity Line of Credit – open to future advances
• Construction to Perm loan – not modifi
ed to permanent financing
• Second homes or investment properties
SAME SAME
Income/Employment Verification • Income documentation will be required for the applicant with the hardship.
Determining Qualifying Income Does Not Apply Use the following steps to determine the qualifying income amount for underemployed
1. Document the applicant’s base pay from the previous year’s W-2(s).
2. Calculate the current income by dividing the YTD earnings shown on the most recent pay-stub by the number of months worked this year.
3. Determine if the household income has decreased 15% or more since the hardship event.
Use the following steps to determine the qualifying income amount for reinstatement
1. Document the applicant’s base pay from the previous year’s W-2(s).
2. Calculate the current income by dividing the YTD earnings shown on the most recent pay-stub by the number of months worked this year.
3. Document hardship with either a 15% reduc
tion in income or job loss.
4. Determine if the mortgage debt to income ration is 35% or below.
Property Types • Single family (attached or detached)
• Condominium unit
• Manufactured Home on a foundation permanently afI
xed to real estate owned by the borrower. Title to manufactured home must be surrendered and the manufactured home must be taxed as real property (must supply documentation to support mobile home is taxed as real property).
• 1 – 5 unit properties where the borrower is living in one of the units.
SAME SAME
Occupancy Applicants must owner occupy the property and be a resident of Mississippi and a U.S. citizen. SAME SAME
Seasoning Requirements Hardship must have occurred after the purchase of the home. SAME SAME
Title/Deed Restrictions The following are ineligible -
• Blind Trusts
• Irrevocable trusts • 1031 Exchanges
SAME SAME
Title Requirements All person(s) on the title to the affected real property must be on the loan documents and a documented hardship must be provided. SAME SAME
Underwriting Loans will be underwritten by MHC underwriters. SAME SAME
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