Florida eases rules for mortgage aid

Florida's leading housing agency will more than double the amount of federal mortgage assistance it provides to unemployed homeowners who have fallen behind on their loan payments.

The state has basically loosened the purse strings on a federally funded foreclosure-prevention program that has so far benefited only a small percentage of the homeowners who have applied for help from the Hardest Hit Fund.

"We found that people were coming to the end of their benefits and they had been unable to secure a job to pull themselves up," said Len Tylka, chairman of Florida Housing Finance Corp. "They had good prospects and things were starting to turn around. They were just falling short. And we had gone for so long without really distributing the kind of money we wanted to distribute."

Until now, unemployed or underemployed homeowners who qualified could get only six months of mortgage help, totaling as much as $12,000, from the federal Hardest Hit Fund, which is administered in this state by the Florida Housing Finance Corp. But according to new guidelines released this week, recipients now will be able to receive help totaling $24,000 for an entire year.

Previously, struggling owners could also qualify for a one-time payment of $6,000 to make their mortgage current — as long as they found jobs and recovered from being underemployed, so that they could continue making payments on their own. Under the changes made public this week, those homeowners can now get as much as $25,000.

As of the beginning of June, Florida had received 28,556 applications from homeowners for Hardest Hit Fund assistance. About 5,700 were declared eligible for funds and about 2,000 homeowners actually received assistance — and most of those exhausted their benefits. Only about 225 Florida homeowners received the one-time boost to help them bring their mortgage up to date.

"People thought this was a real freebie handout, but the qualifications were stringent — and they need to be," said Tylka, a custom-home builder based in West Palm Beach. "We felt the need to be really careful, because this is taxpayers' money and not something to throw around. We are doing what we should be doing."

Still, Tylka said, the housing agency, though needing to remain strict about spending the funds, would like to assist more qualified applicants.

Until now, recipients could be no more than six months behind on their mortgage payments to qualify for the aid. But under the new rules, the lender holding the delinquent mortgage determines whether the homeowner should get the funds, regardless of how far behind the owner is on the loan payments.

The revised eligibility criteria and program benefits are available at flhardesthithelp.org.

When the program was about to debut last year, the Florida Housing Finance Corp. delayed a February launch when newly elected Gov. Rick Scott asked that the assistance for each qualified homeowner be cut from a proposed $35,000 over 18 months to just $12,000 over six months.

Other states have also been revisiting their rules to beef up the distribution of funds. Earlier this week in Nevada, for instance, that state announced it would allow applicants to own more than one home, though any assistance can be applied only to the mortgage on the primary residence. Nevada also loosened its income-documentation requirements, and people with a permanent financial hardship — such as retirement or long-term disability — can now participate.

The Nevada program, unlike Florida's, also includes a reduction in the loan's principal of as much as $100,000 if the company servicing the loan approves.

By Mary Shanklin, Orlando Sentinel

mshanklin@tribune.com or 407-420-5538