TALLAHASSEE—During a press conference on
Friday, September 20, Florida Housing Finance Corporation (Florida Housing)
announced that next week, Florida homeowners who have remained current on their
mortgages may apply for federal assistance from the Florida Hardest-Hit Fund
Principal Reduction (HHF-PR) Program. The online application, www.PrincipalReductionFLHHF.org,
will open at 9:00 a.m. (Eastern) on Wednesday, September 25, and will be
available in all 67 counties.
“This morning, Florida Housing’s
Board of Directors approved $350 million in federal Hardest-Hit funds allocated
to our state to be used specifically for a principal reduction program,” said Steve
Auger, executive director of Florida Housing. “While our state’s housing market
continues to recover, many Florida homeowners have remained current on their
mortgage payments in spite of their homes being substantially underwater. For
those who qualify, this new program can help to reduce their principal balance,
which can result in a lower monthly payment and put more money in their
Initially, only 25,000 completed and
submitted applications will be accepted for eligibility determination, via the
website only. When that number has been reached, the ability to start a new
application will be disabled so that staff can begin processing the completed
applications. However, if additional funding is available for the program after
this initial launch, Florida Housing will notify the public prior to re-opening
the application process.
The Florida HHF-PR program is
designed to provide up to $50,000 to eligible homeowners who owe at least 125%
more on their home than its current market value—commonly known as having a
home that is “underwater.” Funds will be applied to reduce the principal
balance of the first mortgage to reduce the loan-to-value (LTV) of the first
mortgage to no less than 100%. The mortgage can then be recast (re-amortized)
or refinanced to produce a lower monthly mortgage payment.
The minimum qualifications a
homeowner must meet to be considered for participation in the Florida HHF-PR
program are as follows:
· Must be a Florida resident and a
legal US resident/legal alien, and occupy the property as the primary
· Must be current on the monthly
mortgage payment—first mortgage payment cannot have been 60 or more days late
within the past 24 months;
· The first mortgage must have
originated prior to January 1, 2010;
· The unpaid principal balance for the
first mortgage cannot exceed $350,000;
· The loan-to-value for the first
mortgage must be greater than 125%—in other words, home must be more than 125%
· The total household income,
including all persons age 18 years and older who live in the home, must be less
than 140% of the area median income.
Principal reduction program funds
will be in the form of a 0% percent, deferred-payment loan that will be
subordinate to current mortgages on the home. The loan can be forgiven over a
five-year period, at a rate of 20% each year. For conventional mortgages, once
HHF-PR funds are applied to the principal, the mortgage will be recast (the
terms of the loans will remain the same, but the loan will be re-amortized).
If the borrower has a FHA, VA or
USDA-RD mortgage, the mortgage will need to be refinanced within 120 days after
closing on HHF principal reduction funds in order to receive the pro rata
If a refinance is not completed
within the specified time, the principal reduction loan will be 100% forgiven
after a full five years of the borrower remaining in the home.
in every Florida county may apply for the Florida HHF-PR program by using the
official website: www.PrincipalReductionFLHHF.org.
The site contains all the information users will need to begin the application
process, including a program fact sheet and answers to frequently asked questions.
Additionally, the Florida HHF Toll-free Information Line [1-(877)-863-5244]
will be open on Saturday, September 21, and Sunday, September 22, from 9:00
a.m. – 5:00 p.m. to answer any questions callers may have about the program.
The official Florida HHF-PR website is the only way a
homeowner can apply for assistance. Therefore, homeowners should verify that
they are using www.PrincipalReductionFLHHF.org
before providing personal information via
the web. If applicants are suspicious about a website, they can submit a report
on the official HHF-PR website by clicking the “Report Fraud” link on the
homepage. Also, they may call the Florida HHF Toll-free Information Line to
ensure they are using the correct website address. Application for the Florida HHF-PR program is
FREE-OF-CHARGE, and applicants will not be asked to pay for any eligibility
determination services in conjunction with applying for the program.
announced on February 19, 2010, by the US Department of the Treasury
(Treasury), the “Housing Finance Agency (HFA) Innovation Fund for the
Hardest-Hit Housing Markets” (HFA Hardest-Hit Fund) provides federal funding to
states hardest hit by the aftermath of the burst of the housing bubble. To
date, $7.6 billion has been infused into the HFA Hardest-Hit Fund for 18 states
and the District of Columbia; Florida’s allocation stands at more than $1
billion. The goal is to help create sustainable homeownership in our state.