Foreclosure, Emergency Shelter and Homeless Assistance

Unfortunately, homelessness due to foreclosures and other factors is a reality for some people with disabilities. But when constraints on the budget are pushed to the breaking point, there are some resources designed to help people with disabilities, or those with low incomes, recover from losing a home. Or better yet, there are resources designed to head disaster off at the pass.

Avoiding foreclosure

What can I do if I’m behind on payments or on the verge of foreclosure?

For some homeowners that have been impacted by the economy, or for whom the expense of a home has become untenable, there are programs that can help prevent the prospect of a foreclosure. Most of these programs have been implemented in the past five years to help bring stability to families, and to the housing market in general. Most of the programs are administered by either HUD, or the U.S. Department of Treasury. However, homeowners will negotiate entry into these programs with their lender or mortgage servicer.

Homeowners should remember that, although there are many new programs out there, saving a home once payments are behind will be a tough process. It’s important to know that a homeowner will need to be an aggressive in making sure he or she receives all of the assistance to which they are entitled to.

Programs designed to help people struggling with a mortgage include:

• Making Home Affordable – Known as the MHA program, this program allows qualified homeowners to lower their monthly payments so that the payment is more affordable. The process will include refinancing an existing loan, so an applicant can take advantage of low rates. When a home is no longer affordable under any circumstances, it also allows a homeowner to exit the mortgage without having a damaging foreclosure on his or her credit.
• Principal Reduction Alternative – The PRA program allows a homeowner that is in a home that has been appraised for significantly less than an applicant’s mortgage to negotiate a reduction in the amount owed on the mortgage.
• Home Affordable Modification Program – This program, often referred to as HAMP, lowers a person’s mortgage payment to 31 percent of an applicant’s income, which significantly reduces one’s monthly payment.
• Second Lein Modification – This program allows people with a second mortgage reduce what they owe on this mortgage as long as they have received a modified mortgage through the Home Affordable process.
• Home Affordable Refinance – This program is designed for people with current mortgages that have been denied a refinance because the value of a home has declined.
• Treasury and FHA Lein Program – If a homeowners first mortgage lender has agreed to an FHA refinance, this program provides an avenue to secure a reduction on, or elimination of, a second mortgage.

Unemployed homeowners also have some additional options to revise, eliminate or reduce the amount of a mortgage through federal programs.

Programs include:

• Forbearance – The FHA requires services to extend a forbearance period to homeowners that have lost their jobs. This can mean that a homeowner may be eligible for up to 12 months forbearance. This, however, is only for individuals that have an FHA mortgage.
• Home Affordable Unemployment Plan – This plan gives homeowners that are unemployed an option to suspend payments for a year while they seek employment. This helps homeowners make provisions for new employment, or shore up enough funds at the end of a month to resume making payments.

Sometimes, it makes more sense for a homeowner to not try to save their home. This is a painful prospect for homeowners, many of whom have put all of their financial resources into homeownership. But when a home has become a financial thorn in the side, the federal government has provided a way to enter into a “managed exit.” This is often a person’s best chance to avoid a foreclosure.

The program that provides a managed exit from homeownership is called the Home Affordable Foreclosure Alternatives Program. This program aims to provide a transition from homeownership that leaves an applicant financially-whole at the end of the process. The HAFA allows eligible homeowners with an option to participate in a short sale, or a deed-in-lieu foreclosure, which is not as impactful on a person’s credit as a conventional foreclosure.

People that are interested in securing a low income home loan, or need to locate options for a home loan they are struggling with, should contact their local HUD office. There, a professional will be able to further explain a homeowner’s options and help them navigate what is often a long, frustrating process.

Homeless Assistance
and Emergency Shelter

Unfortunately, homelessness due to foreclosures and other factors is a reality for some people with disabilities. But when constraints on the budget are pushed to the breaking point, there are some resources designed to help people with disabilities, or those with low incomes, recover from losing a home. Or better yet, there are resources designed to head disaster off at the pass.

Four items crucial to homeless assistance and emergency shelter programs include:

• The Homeless Emergency and Rapid Transition to Housing Act
• The Emergency Solutions Grants, or ESG
• Continuum of Care Programs
• Food Banks

These programs are detailed below.

The Homeless Emergency and Rapid Transition to Housing Act, or HEARTH Act

What is the HEARTH Act??

The Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009, or the HEARTH Act, represents a consolidation of the Department of Housing and Urban Development’s competitive grant programs. It put into place resources that help local agencies provide services to people facing homelessness, and streamlines costs associated with funding homeless prevention and housing programs.

The Emergency Solutions Grants, or ESG

Homeless shelters are a type of emergency housing in which people can stay for a pre-determined amount of time if they find themselves without an adequate, safe place to live. Unfortunately, many people with disabilities find themselves homeless because they have limited incomes, or are unable to work.

Shelter placement is available to people who have been displaced from their home. The Emergency Solutions Grants, or ESG, program is intended to fund shelter activities, homelessness prevention, and rapid rehousing for people that are caught in the difficult position of having to rely on the shelter system to keep a roof over their head.

The considerations of emergency housing are especially dire for a family that includes a person with disabilities because shelters are not set up to cope with special needs. It’s a system that’s set up to meet the bare minimum requirements for living while other solutions are found.

Those solutions are found during what is termed “continuum of care,” or managing a person’s needs over a period of time.

ESG grant recipients include organizations that provide shelter housing, and organizations that provide services designed to help people get into safe, affordable housing. These organizations include:

• State or local governments
• Non-profit or charitable groups
• Private organizations

These groups can provide funds to sub-grantees that provide services directly to individuals or groups involved in housing activities.

What types of projects are funded through ESG monies?

Today, ESG funds focus on five areas that help people out of homelessness, or avoid it all together. By targeting certain aspects of the emergency housing dilemma, housing officials can put into place a structure that acts as a catch-all for families living at, or below, the margins.

The four key components of the EGS system are:

• Street outreach – Locating homeless individuals, and providing them with services such as mental health assistance, substance abuse services or medical care that can help turn their situation around.
• Emergency shelter – Paying for services that assist shelter residents, such as case management, child care, employment services, training, and transportation. Also, funds can be used to pay for costs associated with the actual shelter facility.
• Homeless prevention and rapid re-housing – Funding for housing relocation and services that bring stability to families. The funds can be used for rental application fees, security deposits, utility deposits, placement activities and rental assistance.
• Homeless Management Information System, or HMIS – Funds can be used to collect information for the HMIS system, which tracks data related to homeless and at-risk populations. Computer repair, software upgrades, technical support and salaries of information technology professionals can be paid for using ESG funds.

Continuum of Care Programs

What programs are in place to help a person avoid homelessness?

Not having the security of having a clean, safe place to live can be highly stressful for parents, and confusing to a child. If a child has disabilities, his or her ability to cope with such a situation will be compromised.

The government recognizes the hardships that families that include a member with disabilities face, and have designed programs to help these families avoid homelessness, or diffuse the situation if a family is homeless. These are called Continuum of Care programs.

Here are some programs designed to help families:

• Shelter Plus Care Program – Known as the S & C program, Shelter Plus provides rental assistance to homeless persons with log-term disabilities. The help comes in the form of supportive services that inject resources and funding into a situation where none of those things exists.
• Single-Room Occupancy Program – The SRO program offers homeless persons with shelter at dwellings that have several, single rooms. Under the program, HUD enters into contracts with local public housing agencies that rehabilitate, and renovate, multiple single-room units. The authorities then make payments to participating owners on behalf of homeless individuals.
• Supportive Housing Program – This program is designed to help people that are homeless to develop strategies for independent living. The program is designed to offer training on decision-making and skills enhancement. The SHP program requires caseworkers to monitor a person’s progress as they cycle towards self-sufficiency.

Programs that exist outside of the COC environment include:

• Community Development Block Grant Program – This program, which is commonly referred to as the CDBG program, is a grant program that provides federal funds to distressed municipal governments, or “entitlement communities,” so that they can fund community programs. The local government decides what projects are funded; often times, these initiatives include loan programs for home repairs, homeless assistance, and other projects intended to bring stability to communities that are home to several low-income residents.
• Title V Under-Utilized Housing provision – As part of the McKinney-Vento Act, the Title 5 provision allows the federal government to make available vacant or unused properties to assist homeless individuals. The facilities can be used to provide temporary shelter of services to the homeless. The government does not provide any funding once it is determined a building can be used for that purpose.
• Neighborhood Stabilization Program – This program was established to help neighborhoods hit hard by foreclosures and abandonment. The grant program provides dollars for municipal governments to acquire housing or pay for services in the community. How the funds are expended depends on how a community decides the funds should be spent, however, in many cities, foreclosure prevention counseling is paid for using these funds.

What are the considerations for emergency housing?

Being homeless can be a situation that can be difficult to bounce back from, both psychologically and financially. Most shelters allow a family to stay at least 90 days; and within that time, caseworkers do their best to identify solutions for families. One of the things that will help a family get through this difficult experience is to be part of the solution. There are few options offered in a shelter environment, but always remember, it’s a temporary situation that a family can build on to obtain a happy, stable life, once the right supports are brought into place.

Are you in need of emergency food assistance?

If so, visit Emergency Food Assistance Program, or TEFAP for more information.

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