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Homeowners Emergency Mortgage Assistance Program
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Answers to common questions about the
Homeowner's Emergency Mortgage Assistance Loan Program administered by the
Pennsylvania Housing Finance Agency
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WHAT IS THE HOMEOWNER'S EMERGENCY MORTGAGE ASSISTANCE
PROGRAM?
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IS THE HEMAP
LOAN A LIEN AGAINST THE HOME?
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WHEN DOES
REPAYMENT BEGIN AND ON WHAT TERMS?
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WHO QUALIFIES FOR A HEMAP
LOAN?
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WHAT ARE
CIRCUMSTANCES BEYOND YOUR CONTROL?
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HOW DO YOU DEMONSTRATE A REASONABLE PROSPECT OF RESUMING FULL MORTGAGE
PAYMENTS?
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HOW LONG DOES THE PROCESS
TAKE?
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IF REJECTED. CAN
THE DECISION BE APPEALED?
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WHAT IF CIRCUMSTANCES CHANGE?
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HOW CAN
MORE INFORMATION BE OBTAINED ABOUT HEMAP?
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WHAT IS THE HOMEOWNER'S EMERGENCY MORTGAGE ASSISTANCE
PROGRAM?
Act 91 of 1983 created the
Homeowner's Emergency Mortgage Assistance Program (known as "HEMAP"),
The HEMAP program is administered by the PA Housing Finance Agency ("PHFA")
and is funded by appropriations in the state budget and from repayment of
loans. The purpose of the program is to prevent widespread mortgage
foreclosures and distress sales of homes which result from default caused by
circumstances beyond a homeowner's control.
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WHAT IS THE ROLE OF THE COUNSELING AGENCY?
The Counseling
Agency is under contract with PHFA to help prepare an application for a HEMAP
loan. The Counseling Agency does not make the decision to approve or deny
HEMAP loan applications. They do not make any recommendations to PHFA as
to whether or not a homeowner should be granted a loan. Their job is to help
homeowners present the most complete and accurate application possible.
Homeowners must provide all necessary information with their loan application.
The circumstances that caused their financial hardship and the factors
affecting their reasonable prospect of resuming mortgage payments should be
explained in detail. Certain income and expense . information must be
documented. The Counseling Agency should offer suggestions which will help
homeowners obtain the necessary information.
The Counseling
Agency is prepared to counsel homeowners with their financial matters and
spending habits. If appropriate, the Counseling Agency will attempt a
workout agreement with the lender. The Counseling Agency should also provide
information about other financial assistance or employment training
opportunities in their community.
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WHAT KINDS OF MORTGAGE ASSISTANCE LOANS ARE AVAILABLE?
HEMAP provides the following two
types of loans: 1.) Continuing ioan -the Agency brings the
homeowners mortgage current and provides continuing help with their mortgage.
Total assistance cannot exceed 24 monthly payments.. Homeowners approved for a
continuing loan will be required to make a monthly contribution towards their
mortgage payment based upon their income and housing expenses. They must pay
at least $25.00 per month per mortgage assisted. 2.) Non-continuing loan
- the Agency simply brings the homeowners mortgage current. Homeowner's
are responsible for their own mortgage payments after the closing and
immediate repayment of at least $25.00/mo/mortgage assisted is required.
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WHEN DOES REPAYMENT BEGIN AND ON WHAT TERMS?
A non-continuing loan must begin repayment immediately of at feast $25.00
per month per mortgage assisted. Otherwise, repayment begins when 40%
of a homeowner's net monthly income exceeds their total housing expense. Total housing expense includes mortgage payments, escrows for taxes and
insurance, and home utility expenses. Homeowners are recertified at
least annually to determine if repayment should be increased or
decreased depending upon their net income and total housing expense
calculations. The HEMAP loan is at 9% interest and interest only accrues when
the homeowner is required to repay based on the 40% test. Homeowner's must
seek repayment/refinance provisions once they have established better credit
and equity in property.
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WHO QUALIFIES FOR A HEMAP LOAN?
Homeowner must be at least 60 days delinquent on their mortgage and
have received an Act 91 Notice from their lender-
The home must be located in Pennsylvania and be owner-occupied.
The property must be a one or two family residence- A home used primarily
for business purposes is not eligible.
Mortgage
loans obtained primarily for business purposes are not eligible.
FHA Title (I loans are not eligible.
The homeowner must have had a favorable mortgage credit history prior
to the delinquency during the previous 5 years.
The homeowner must be suffering financial hardship due to circumstances
beyond their control.
The homeowner must have a reasonable prospect of resuming full
mortgage payments within 24 months and paying the mortgage in full by
maturity.
HEMAP loan cannot exceed $60,000.00 nor exceed 24 months of assistance.
PHFA/HEMAP must have at least a 3rd lien position.
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WHAT ARE CIRCUMSTANCES BEYOND YOUR CONTROL?
To be eligible for a HEMAP loan, a homeowner must be suffering
financial hardship due to circumstances beyond their control. Loss of
employment due to layoff, strike or plant closing, serious medical
problems, divorce or separation are typically circumstances
beyond one's control. On the other hand, quitting a job, committing a
crime and being Jailed, or money mismanagement are all examples of
circumstances within one's control.
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HOW DO YOU DEMONSTRATE A REASONABLE
PROSPECT OF RESUMING FULL MORTGAGE PAYMENTS?
Some
circumstances which cause financial hardship are by nature temporary and
predictable. A job layoff or temporary unemployment due to a curable medical
condition are examples or circumstances which will dearly come and go,
and the homeowner will be re-employed and be able to resume making
their mortgage payments. The loss of a job usually creates a longer
term problem; however, the homeowner's job skills, training, job history.
efforts at retraining, etc., are all relevant factors which the Agency
will consider in determining whether there is a reasonable prospect of
the homeowner being able to resume full mortgage payments within 24 months. ff a person demonstrates a good employment history, a good credit
history while employed, employable skills or efforts toward retraining, and an
active search for employment, they will probably meet the reasonable prospect
issue.
On the other hand, a person who has mortgaged their home to the limit, whose
spouse dies without life insurance, who has no employable skills, and has no
plans of entering into an employment training program probably has little
prospect of resuming their mortgage payments within 24 months and would not be
found eligible.
It is extremely
important for the homeowner to do a complete self evaluation of their job
history, job skills and potential for securing future employment in order to
present an accurate picture of whether or not there is a reasonable
prospect of being able to resume mortgage payments in the future.
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HOW LONG DOES THE PROCESS TAKE?
A homeowner must have a face to face meeting with the
Counseling Agency within
30 days of the date of their Act 91 Notice. The Counseling Agency must forward
the application to PHFA within 30 days of the face to face meeting date. PHFA
has 60 days from application receipt date to make a decision. If the
application is approved, it takes approximately 60 days for the loan to close-
Within 15 days after the dosing, the Agency will disburse checks to bring the
mortgage(s) and taxes current.
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IF REJECTED. CAN THE DECISION BE APPEALED?
If the loan
request is rejected, applicants have the right to request an appeal
hearing. The request must be made in writing within 15 days of the date
of the rejection letter- Hearing examiners, who are separate and
distinct from those staff making the initial decision, schedule and
conduct hearings to weigh the facts and circumstances and determine if the
initial decision was correct and whether a change in circumstances
occurred since the initial decision. If the Hearing Examiner upholds the
initial decision, a homeowner has 30 days to file a further appeal with the
Commonwealth Court.
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WHAT IF CIRCUMSTANCES CHANGE?
At! HEMAP loans are reviewed at
least once a year to recertify their eligibility based upon
financial information and other circumstances. If homeowners are
receiving a continuing loan, the recent process
will determine if PHFA loan disbursements should continue, increase, decrease,
or stop. If loan disbursements are not currently being made, the amount of loan
repayment is determined at this time. Just because a homeowner is being
recertified does not mean that payments will be decreased or stopped However, failure to cooperate with the recertification process will definitely
result in a termination of loan disbursements and/or trigger a demand for full
payment The recertification process will occur each year until the loan
is paid off. This process is handled through the mail; therefore, it
is extremely important that PHFA be notified of any change in mailing address.
If circumstances change at any time, homeowners
may request a reevaluation. The reevaluation request must be in writing and
supporting documentation must be included- New employment, toss of a job. high
medical expenses, large home maintenance expenses, or any increase or decrease
in household income are ail good reasons to request a reevaluation.
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HOW CAN MORE INFORMATION BE OBTAINED ABOUT HEMAP?
Act 91 can be found in Purdon's PA Statutes at
35 P.S. Section 1680.401-C through 1680.411-C. PHFA's Guidelines for the program
can be found in Pennsylvania Code of Regulations at 12 Pa, Code Section 31.201
etc.
PHFA Web page
PHFA staff can be reached by phone or by mail as set forth below:
General Information - (717)780-3940 Toll Free -1-800-342-2397 Hearing
Impaired - (717)780-1869 Fax No.-(717)780-3995
WEB ADDRESS: WWW.PHFA.0RG
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