When it comes to government foreclosure avoidance programs, much of the focus has been on federal efforts such as Making Home Affordable. But many states offer their own programs as well, some of which even offer direct financial assistance for qualified homeowners.

To be sure, the vast majority of state homeowner assistance programs focus primarily on HUD-certified counseling services that can help financially pressed homeowners work out a loan modification with their lender or mortgage servicer. In some cases, this may extend to mitigation services that can provide a third party to work with the homeowner and lender to help move the process along to a solution.

In a few states though, homeowners who meet certain qualifications may be able to obtain bridge loans or other direct financial assistance to help cover their mortgage costs during a temporary financial crisis. All of these should be familiar to HUD-certified housing counselors in each particular state, who can provide advice on eligibility and applying.

Funding for these and other programs may be limited, and other, similar programs may also be available in these and other states. Links to foreclosure assistance programs in all 50 states is available here http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_foreclosure/local here on the Department of Housing and Urban Development web site.

Descriptions of some state financial assistance programs are provided below.


The Connecticut Housing Finance Authority (CHFA) provides financial assistance to qualified homeowners experiencing temporary financial problems through the Emergency Mortgage Assistance Program (EMAP). The program helps bring delinquent mortgages up to date and provides partial assistance on mortgage payments for up to five years. The assistance is in the form of a 30-year loan on which payments begin when the borrower's finances improve.

The homeowner's difficulty in making mortgage payments must be due to either an unforeseen financial crisis or a significant increase in their monthly mortgage payments. Applicants must have previously attempted to renegotiate their mortgage payments without success.


Homeowners in the Louisville area who are at risk of foreclosure through no fault of their own may be eligible for a secured loan from the Louisville Metro Department of Housing and Family Services. They must be able to show that their finances will allow them to resume making their monthly mortgage payments once the loan gets them through their present difficulty.

New Jersey

The New Jersey Mortgage Assistance Pilot (MAP) Program provides a loan of up to $20,000 to assist homeowner who are at risk of losing their home due to a temporary financial problems beyond their control. This could be due to a layoff, medical situation, change in household composition or other situation causing a financial strain. The loan is in the form of a lien on the home that becomes due when the property is sold, refinanced or is no longer the principal residence of the mortgage holder.


Limited assistance is available through rescue grants or loans provided under the state's Save the Dream program. The program, administered through the NeighborWorks America housing and credit counseling agency, is funded with $5 million from the state's Department of Development and Housing Finance Agency.

At least 700 residents have received grants or loans so far under the program. The state also offers a mediation program administered through the Ohio Supreme Court to help homeowners work out loan modifications with lenders.

North Carolina

Residents who are at risk of losing their home due to unemployment may be able to obtain a bridge laon through the North Carolina Housing Finance Agency's Home Protection Program. HUD-certified housing counseling agencies can help determine eligibility and also arrange for a 120-day stay of foreclosure while applications are being reviewed.

In addition, the North Carolina Office of the Commissioner of Banks provides assistance in renegotiating loans to homeowners who obtained subprime loans from 2005-07, as well as providing loan modification assistance to homeowners who may have been victims of predatory lending.


Some of the most extensive foreclosure assistance programs are offered by Pennsylvania. The REfinance to an Affordable Loan Program (REAL) allows qualified homeowners to refinance into a new 30-year fixed mortgage.

The program has fairly generous credit limits, allowing refinancing for homeowners who are up to 59 days delinquent on their current mortgage and with credit scores as low as 620. Homeowners with even lower credit scores may qualify if their mortgage reset or had a lump sum due within the past year.

Another option is the Homeowner's Equity Recovery Opportunity (HERO) Loan Program, in which the which the Pennsylvania Housing Finance Agency (PHFA) purchases homeowner's mortgage directly from the lender, then sets up a new payment schedule with PHFA holding the note.

Funding is limited for this program, which is designed for those who can't qualify for the REAL or other refinance options due to credit problems or owing more than the home's current market value.

A third option is the Homeowner's Emergency Mortgage Assistance Program (HEMAP), established through the Pennsylvania Foreclosure Prevention Act of 1983. The program provides a loan, secured by the property in question, that brings the delinquent mortgage current and may also provide assistance in meeting future mortgage payments for a limited time.

Loans are limited to a maximum of 36 months or $60,000, whichever comes first. Payments are structured so that loan recipients are paying 35 percent of their net monthly income toward housing expenses. (these figures are 24 months and 40 percent during times when state unemployment is below 6.5 percent).

For more information

More information on these and similar programs can be obtained through HUD-certified counselors in each state. For links to homeowner assistance programs in each state are available on the HUD web site http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_foreclosure/local

    Published on July 15, 2009