The Georgia Department of Community Affairs has launched
a new program to help the approximately 150,000 Georgians whose mortgages are
greater than the value of their homes.
The Underwater
Georgia program is targeted to relieve this pressure by using federal funds
to make a one-time payment to reduce the principal balance on their home.
Georgia’s housing market was hit hard by the Great
Recession, and some Georgia homeowners still find that their houses are worth
less today than before the recession.
Many workers find while job opportunities are increasing,
they are unable to move to jobs in new areas because their outstanding mortgage
is higher than the selling price of their house. This is causing inefficiencies
in the labor market as workers are reluctant to take jobs that will cause them
to move and lose money when they sell their residence, which is the principal
source of savings for most families.
By reducing homeowners’ mortgage principal, the program
hopes to reduce stress in families, improve the housing market, and allow
workers to pursue job opportunities even if it requires a move to a new area.
Application
process
For three weeks, from September 28-October 18,
2016, Georgia residents will be able to visit www.UnderwaterGeorgia.org to
fill out a pre-application for these funds.
All applications will be assigned a number, which will be
sent to a third party for a blind random selection process. Next, the
randomly selected applications will be reviewed, in the order selected, for
eligibility and those deemed eligible will continue through the process.
To be eligible, a homeowner must:
• Owe
more than home is currently worth.
• Owe
no more than $250,000.
• Purchased
home before 2012.
• Less
than 90 days late on mortgage.
• Mortgage
lender is willing to participate.
• Have
not previously received HomeSafe Georgia assistance.
It is expected that the program will receive more
applications than available funding, so it is unlikely that all eligible
applicants will receive assistance. Based on current funding, an estimated
2,700-3,000 eligible Georgia homeowners will receive assistance.
How the Program
works
According to the Georgia Department of Community Affairs,
for successful applicants, a one-time payment will be made to your
lender/servicer on your behalf. The funds will be used to reduce your principal
balance, usually on the first mortgage. The funds will be provided as an
interest-free loan. A subordinate lien will be placed on the home, for which
the balance will be forgiven at 20% each year.
After 5 years, the lien will be cancelled.
If you sell your home before the lien is cancelled and
you have equity in the home, you will have to repay the portion of the loan
that is outstanding. If you sell your home before the lien is cancelled and
there is no equity in the home, repayment will not be required. HomeSafe
Georgia will subordinate to a “no cash out” refinance.
Determining
Eligibility
To see if you are eligible to participate in this
program, you may take DCA’s Eligibility Quiz here.
Customer Service representatives will be available 24
hours a day to take calls during the pre-application submission period.
Toll Free: 1-877-519-4443
Para asistencia en Español, presiene (4) cuatro.
Para asistencia en Español, presiene (4) cuatro.
TDD/TYY Line: toll free 1-877-204-1194
Email: underwatergeorgia@dca.ga.gov
