Foreclosure Prevention Programs

• The Obama Administration has implemented several foreclosure prevention programs that help distressed homeowners. The Making Home Affordable programs help homeowners obtain a loan modification, refinance or forbearance. They can also receive help with selling their home even if the property has negative equity. Hardest Hit money went to states that were impacted with the most foreclosures. Eligible homeowners in these states can receive a reduction to the unpaid principal balance of their loan, financial aid for mortgage payments for those who have lost their job and transition assistance for those who need to secure new housing. The Emergency Homeowners Loan Program is a declining-balance loan for up to $50,000 to unemployed homeowners in states that did not receive Hardest Hit funding.
  
  

Rental Assistance Programs

• HUD has two affordable housing programs for eligible low-income households. The public housing program subsidizes a unit's rent charge to allow low-income families to afford the payment. The family is responsible to pay 30 percent of their income toward the rent. HUD pays the remaining portion. The Section 8 Housing Choice Voucher program also subsidizes rent for low-income families; however, the rental subsidy is not tied to the unit. The family can have their rent subsidized at any rental housing that will accept a voucher as form of payment for a portion of the rent.
  
  

Home Ownership Programs

• HUD has several programs that allow low-income households and minorities to achieve home ownership. The Federal Housing Administration, or FHA, has a low-cost loan option that makes it easy for first-time homebuyers to qualify for a loan. As of January 2011, a minimum credit score of 640 and money for a 3.5-percent down payment are the loan requirements. Tenants with a Section 8 voucher can participate in a home ownership program that allows the rental assistance payment to go toward a mortgage. The tenant must meet minimum income requirements and have been employed for at least a year. The Good Neighbor Next Door Program allows firefighters, law enforcement personnel, emergency medical technicians and teachers to purchase a HUD home at a 50-percent discount. The homebuyer must agree to live in the home for at least three years to get the discount.
  
  

Rehabilitation Programs

• The U.S. Department of Agriculture, or USDA, has a rehabilitation grant program for qualified homeowners. To obtain a grant for up to $7,500, the property must be located in a rural area and the homeowner must be age 62 or older. The grant funds must be used toward improvements that make the home safer and more sanitary. The Department of Veterans Affairs offers a Specially Adapted Housing grant for veterans with a service-related disability. As of January 2011, veterans with a service-related disability can modify their homes with a grant up to $63,780.