The North Carolina Home Protection Pilot Program and Loan Fund was created by the General Assembly in 2004 to help homeowners who have lost their jobs avoid foreclosure. Inspired by the large number of North Carolinians who have lost jobs due to recent plant closings, the Pilot Program can provide interest-free loans of up to $20,000 to help qualifying homeowners resolve their mortgage delinquency issues.
WHO QUALIFIES?
In order for a homeowner to be eligible for the LOAN FUND, a homeowner must meet certain criteria, including all of the following:
• have lost their job as a result of changing economic conditions; and
• the home must be established as “real property” located in one of the counties selected as part of the NORTH CAROLINA HOME PROTECTION PILOT PROGRAM AND LOAN FUND.
• the homeowners previously demonstrated ability to make mortgage payments, and whether or not the income available was sufficient to make the mortgage payment prior to the event.
• the homeowner must have a favorable work credit history.
• the homeowner must have a reasonable prospect of resuming full mortgage payments when employed.
• if the homeowner is unemployed, they should be actively seeking work and/or in a training program.
WHAT TYPE OF ASSISTANCE IS AVALABLE?
• the assistance provided to eligible homeowners will be in the form of a loan (not grant), amortized at 0% interest, and repaid over a 15 year period, starting once the period of assistance ends.
• while there is no minimum loan amount, the maximum loan amount is equal to the lesser of $20,000 or 18 months of monthly mortgage payments (PITI).
• the loans are either in the form of a short term or long term assistance, which can be used to bring current mortgage principle (P), mortgage interest (I), property taxes (T) and property insurance (I), and dues for homeowners associations.
• funds can be used in conjunction with loss mitigation, foreclosure - prevention workouts and other Insurer/Investor measures to bring homeowners current.
SHORT TERM ASSISTANCE
Short term assistance is available to eligible homeowners in the form of a loan whose proceeds (a lump sum payment to bring the homeowner current) are remitted to Mortgagees/Servicers from the Loan Fund on the homeowners behalf. The assistance can be used to bring current all mortgage loans. While also resuming their regular monthly mortgage payment, paid directly their Mortgagee/Servicer, the homeowner will immediately begin repaying the Agency short term assistance loan back starting one month after the loan has closed.
LONG TERM ASSISTANCE
Long term assistance is available to eligible homeowners in the form of a loan whose proceeds are remitted to the Mortgagees/Servicers from the Loan Fund on the homeowners behalf. Unlike short term assistance, which is in the form of a one-time, lump sum payment, for up to 18 months. The long term assistance can also be used to bring current all mortgage loans. First, the Agency will use loan proceeds to bring the homeowner current. Then, on a monthly basis, the Agency will use the remaining loan proceeds to remit the difference between the regular mortgage payment amount and what the homeowner can afford to pay to the Mortgagee/Servicer on the homeowners behalf. Again, the assistance will not exceed the lesser of $20,000 or 18 months of the regular mortgage payment amount.
WHEN DOES REPAYMENT BEGIN AND ON WHAT TERMS?
Once the period of assistance ends, homeowners will begin to repay the Agency loan, while continuing to remit their monthly mortgage payments to their Mortgagee/Servicer. Repayment begins the month after the last payment is remitted to the Mortgagee/Servicer by the Agency on the homeowners behalf. Homeowners are expected to repay a minimum of $25 a month recognizing that it is not the Agency’s goal to add to the debt burden of a family transitioning out of economic hardship, repayment hardship cases will be considered on a case- by -case basis.