By Brenda Long, Michigan State University Extension
Some homeowners are still having financial difficulties even though the foreclosure rate in Michigan has significantly declined in recent years with the economy and employment rates improving. All it can take is one large unexpected expense, unemployment or life change. Fortunately, nearly $19 million in funds are still available for eligible delinquent homeowners to get caught up and keep their home.
Bill Hendrian and I have written previous articles about Michigan’s Hardest Hit Fund program, also known as Step Forward Michigan. This federally funded loan program started in 2010 and is designed to help eligible homeowners who are struggling with their mortgage, condo association fees, and/or property taxes to retain ownership of their primary residence. As of September 2018, nearly 37,000 Michigan households in all 83 counties received more than $39 million in assistance, according to MSHDA.
Currently, this is the only statewide assistance program to get caught up on delinquent property taxes. If homeowners are behind three years, on 2016 taxes, they have started receiving notices from their county treasurers about facing foreclosure if those 2016 taxes are not paid by Mar. 31, 2019. Last year, my experience was that homeowners needed to apply to Step Forward Michigan by January to allow for processing time. Situations are reviewed on a case-by-case basis. Most homeowners who procrastinated or did not apply until February or March were not approved in time for this assistance earlier this year. The lesson learned was to apply this fall if you are facing foreclosure with delinquent 2016 property taxes.
Watch a short video for guidance about the Step Forward Michigan application process. The online application can be completed in three ways:
- Go to the Step Forward Michigan website and complete the application yourself plus email, fax or mail the signed application and supporting documents to Step Forward Michigan.
- Call Step Forward Michigan at 866-946-7432 to apply by phone.
- Michigan State University Extension Housing Counselors or other local housing counselors can help homeowners fill out the online application, submit all the required documents, and follow-up until a decision is made. During the past eight years, thousands of Michigan homeowners who worked with our counselors have received assistance to save their homes from foreclosure.
If approved, up to $30,000 is paid directly to the participating mortgage servicer or county treasurer for application directly to the household’s mortgage loan or property taxes. No interest and no payments are required from the homeowner. As cases are reviewed, a lien is placed on the property for five years and 20 percent of the loan is forgiven per year. At the end of the five years, the loan is forgiven. During the five-year period, if the property is transferred, sold, or is no longer the principal residence, the non-forgivable portion is due.
For further information or to see if you qualify for assistance you can go to Step Forward Michigan for a list of frequently asked questions and access an online application and a list of documents that are required to submit an application.
If you do not qualify for Step Forward Michigan, helpful resources are provided to consider other options available.
Facing foreclosure is a difficult financial situation for homeowners. Fortunately many are getting back on track to become current with their payments and keep their homes and stay living in their communities. Find fact sheets and more information about mortgage and property tax foreclosure at MIMoneyHealth.org.
This article was published by Michigan State University Extension. For more information, visit http://www.msue.msu.edu. To have a digest of information delivered straight to your email inbox, visit http://www.msue.msu.edu/newsletters. To contact an expert in your area, visit http://expert.msue.msu.edu, or call 888-MSUE4MI (888-678-3464).
