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Federal Emergency Homeowners' Loan Program

Overview

The Federal Emergency Homeowners’ Loan Program (EHLP) provides assistance to eligible Connecticut homeowners who are 90 days or more delinquent with their first mortgage payment as a result of having suffered a loss of income due to unemployment, underemployment or suffered adverse economic conditions resulting from a medical emergency or serious injury. Utilizing federal funds, eligible homeowners are given a mortgage assistance loan to pay mortgage arrearages, delinquent taxes, homeowners insurance, condominium fees and foreclosure related legal fees as well as assist with monthly mortgage payments for up to 24 months or $50,000 whichever comes first. The assistance is provided as an interest free forgivable mortgage loan as long as the borrowers continue to reside in the property and pay their first mortgage on time.  

The EHLP program is available on a first come, first serve basis for a limited time.  

Follow the links below for more information regarding the Emergency Homeowners’ Loan Program. m

 

 

NOTE:  the deadline to apply for the Federal Emergency Homeowners Loan Program was September 1, 2011.

 

Who can apply for a Emergency Homeowners’ Program loan?

Generally, EHLP assists Connecticut homeowners who are facing foreclosure, are at least 90 days delinquent on their mortgage payments. (Homeowners interested in applying for this Program should contact the CHFA Customer Call Center at 877-571-CHFA (2432) because EHLP has some technical requirements).

  • Income Thresholds
    Eligible homeowners’ current household income must be equal to or less than 120 percent of the Area Median Income (AMI) adjusted for household size for the City/Town where their principal residence is located. Household income includes wages, salary, and self-employed earnings and income of all adult members of the household. Please click the Emergency Homeowners’ Program Income Limits link below for more information.

  • Significant Income Reduction
    Eligible homeowners must have a current yearly gross income that is at least 15 percent lower than their income at the time they became unemployed, underemployed or suffered from a medical emergency or serious injury.
      
  • Principal Residence
    Eligible homeowners must reside in the mortgaged property as their principal residence. The mortgaged property must also be a single family residence (1 to 4 unit structure or condominium unit). Please note that no business or commercial use of the property is allowed.
     
  •  Ability to Resume Repayment
    Eligible homeowners must have a reasonable likelihood of being able to resume repayment of the first mortgage obligation and meet other housing expenses and debt obligations within 2 years as determined by CHFA.
  • Loan Terms
    EHLP loans carry 0% interest and will be entirely forgiven five years after monthly assistance ends as long as the borrowers continue to reside in the property and pay their first mortgage on time. 

 

How does the EHLP Program work?

Approved EHLP borrowers receive financial assistance to bring their first mortgage payments up to date plus monthly assistance for up to two years.  CHFA determines how much the borrower can afford to pay each month for their mortgage, taxes, insurance and homeowner association dues if applicable.  The EHLP Program provides monthly assistance to cover the difference between the amount the borrowers can afford to pay and the monthly mortgage payment. The borrowers send CHFA their monthly contribution.  CHFA combines the monthly contribution with the monthly assistance from the EHLP Program to make the payments on the borrowers’ first mortgage.


 

What types of mortgages does the Emergency Homeowners’ Loan Program assist with?

First mortgages on an eligible borrower’s primary residence, including mortgages that are FHA insured, are eligible for EHLP.  


 

What types of property are eligible for an Emergency Homeowners’ Program Loan?

Properties eligible for the Emergency Homeowners’ Loan Program are homes secured with both FHA and non-FHA insured mortgages that are facing foreclosure due to the borrower’s financial hardship resulting from unemployment, underemployment, medical condition or serious injury.  

To be eligible, the property secured by the mortgage must be the primary residence of the applicant and not be recreational, vacation, investment, commercial or rental property.  No part of a home eligible for this loan may be designed for commercial purposes.

In addition, the property must meet one of the definitions listed below:  

    • Single-family home
    • Two- to four-family home, as long as the borrower is an owner-occupant of one of the units
    • Condominium

 

What is the maximum monthly assistance you can receive under the Emergency Homeowners’ Loan Program?

Only homeowners eligible for monthly assistance under the terms of the program will be eligible for assistance under the EHLP program. EHLP program funds are not available to assist homeowners with arrearages only.

    • The maximum total amount of assistance is $50,000 per household.
    • Assistance with monthly mortgage payments may be provided for 12 months which can be extended if necessary for an additional 12 months for a maximum of 24 months of assistance. Monthly mortgage payments must include escrows for property taxes, hazard insurance, and flood insurance, if applicable.
    • Homeowner contribution to monthly first mortgage loan payments will be set at 31 percent of gross income at the time of application, but in no instance will it be less than $25 per month.
    • The amount of monthly assistance is the dollar amount necessary to satisfy the homeowner’s first mortgage loan payment in excess of the required homeowner contribution toward their first mortgage loan payment.

 

Termination of Monthly Assistance

Assistance is terminated and the homeowner resumes full responsibility for meeting the first mortgage loan payments in the event of any of the following circumstances:

    • After 24 months or the maximum loan ($50,000) amount has been reached whichever occurs first;
    • The homeowner fails to report changes in income or employment status;
    • The homeowners’ household income is restored such that the first mortgage payment (Principal, interest, taxes and insurance escrows) is less than 31% of the monthly aggregate household income.
    • The homeowner no longer resides in, sells, or refinances the debt on the mortgaged property; or The homeowner defaults on their required contribution to CHFA toward the first mortgage loan payment.

 

Do you have to repay the Emergency Homeowners’ Program loan? 

FEHLP loan terms allow for a declining balance during the five years immediately following the final assistance payment (the five year repayment period) made on behalf of a homeowner who has successfully completed participated in the program.  No payment is due on the note during the 5 year term so long as the assisted household maintains the property as principal residence and remains current in his or her monthly payments on the first mortgage loan. If the homeowner meets these two conditions, the FEHLP loan balance shall decline by twenty percent (20%) annually. 

Events Triggering Note Repayment:  

The homeowner will be responsible for repayment of the applicable balance of the FHELP note to CHFA or its successor, if, at any time during the five year repayment period, any of the following events occur:

    • The homeowner no longer resides in the mortgaged property as a principal residence, but maintains ownership;
    • The homeowner defaults on its portion of the current mortgage; or
    • The homeowner receives net proceeds from selling or refinancing debt on the home.

 

What else should you know about an Emergency Homeowners’ Program loan?

Income Re-evaluation

After initial income verification at application intake, the homeowner shall be required to notify CHFA of any changes in the household income and/or employment status at any point throughout the entire period of assistance and must provide financial documentation for re-evaluation no less than 12 months from the initial approval when requested by CHFA.


 

How do you apply for an Emergency Homeowners’ Program loan ?

Homeowners may start the application process in any one of the following three ways:  

  1. Contact CHFA’s Customer Call Center at 877-571-CHFA (2432) which will assess your initial program eligibility and provide guidance through the next steps in the EHLP application process;
  2. Contact one of CHFA’s approved foreclosure prevention housing counseling agencies to apply (Please click on the link below for details);
  3. Attend one of CHFA’s housing fairs to apply (Please click on the link below for details).

 

Questions? Contact CHFA.

Please contact CHFA’s Customer Call Center.  

Phone:  (877)571-2432 or (860)571-3500  

Mailing Address:  

Connecticut Housing Finance Authority
Attn: CHFA Call Center
999 West Street Rocky Hill, CT 06067


 

Additional information

The following documents are related to the EHLP Program.  To open and view the document, click on the document title.

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