In an effort to encourage sellers to short sale their homes rather than let them go to foreclosure, in September the Arizona Department of Housing (AZDH) began accepting applications for a new program where they will offer $4,500 to sellers and 3% of the purchase price to buyers for help with closing costs on homes in short sale. The new program is in response to lackluster participation in the existing program aimed at helping struggling homeowners modify the principal balance on their current loan.
The AZDH offers various programs to try and help struggling homeowners keep their homes as well. Under the unemployment mortgage aid program, unemployed Arizona homeowners can receive temporary payment assistance for up to 24 months while they seek employment. Additionally, those who qualify can apply for the aforementioned Principal Reduction Program.
The Principal Reduction Program provides a loan modification utilizing principal reduction of up to $50,000 with a matching contribution from participating lenders to reduce the mortgage payment to 31% of the homeowner’s monthly income. Participants must meet certain requirements, including eligible hardship, property type, loan balance, income level, and other conditions.
While this could be good news for struggling homeowners, the largest servicers and lenders are not required to accept any terms issued by the AZDH and have only agreed to 6 modifications in the state to date.
Still for those who qualify, these programs could help homeowners save their homes from foreclosure as well as salvage their credit. Worth looking into at http://www.housingaz.com/.
