CHARLESTON - A federal program to benefit struggling homeowners will provide $8.3 million to the state of West Virginia.
The U.S. Department of Housing and Urban Development's Emergency Homeowners Loan Program will help homeowners avoid foreclosure by providing assistance for up to 24 months to homeowners who are at risk of foreclosure and have experienced a substantial reduction in income due to involuntary unemployment or medical conditions.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Barack Obama in July, authorized HUD to administer $1 billion in program funding to 32 states and Puerto Rico.
Peter Minter, field office director with the Charleston office, said the decision as to how the funds will be distributed throughout the state has not yet been made.
"Data associated with property foreclosure rates and default and delinquency rates will probably be used when the time comes to distribute the funds," he said.
"Certain target areas will likely be considered."
The program will offer forgivable, deferred-payment "bridge loans" for up to $50,000 for eligible homeowners.
According to HUD officials, those eligible for assistance must be at least three months delinquent in their mortgage payments and have a reasonable likelihood of being able to resume repayment within two years.
The property must be the principal residence of the borrower, and the applicant must have suffered at least a 15 percent reduction in income.
Applications from eligible homeowners will be accepted by the end of this year, said Minter.
"At this point, we are asking people to be patient until additional information about when and how to fill out an application becomes available," said Minter.
Funding allocation among the states was based on the state's share of unemployed homeowners with a mortgage.
The West Virginia Division of Banking reported foreclosures were up nearly 24 percent in 2009 compared to 2008, but Wood County foreclosures have remained relatively stable.
"I think the program is a wonderful thing for West Virginia homeowners who are struggling right now with their mortgages or with the possibility of foreclosure," he said.
"I truly believe this will assist a number of families faced with losing their homes."
To see a state breakdown of funding for the emergency loan program, visit www.hud.gov.