Nearly $155M in fed funds headed to Mich. as part of plan to help homeowners avoid foreclosure

17K Mich. homeowners to get federal mortgage help

LANSING, Mich. — Michigan is ramping up a new program aimed at helping homeowners avoid foreclosures after Wednesday’s announcement that the federal government has approved $154.5 million for the effort.

The state expects the program could help more than 17,000 households, including 11,000 who are currently drawing unemployment benefits.

Distribution of the money could begin July 12. Homeowners who think they may be eligible for the programs should work through their lenders, who then would then submit applications to the Michigan State Housing Development Authority. It could take up to 18 months to distribute all the cash.

President Barack Obama announced the national $1.5 billion investment earlier this year for state’s hit hardest by the mortgage crisis. Arizona, California, Florida and Nevada also will get money in the program’s first round.

A large portion of the Michigan plan offers assistance to homeowners receiving unemployment benefits. Those who qualify could get half of their monthly mortgage paid for through the program — up to $750 a month for up to a year.

The plan also would help homeowners who have fallen behind on payments because of a temporary layoff or a medical condition. Homeowners could get up to $5,000 in assistance under this portion of the program.

A third piece of the program could provide up to $10,000 from the state — plus a match from a lender — to reduce the amount of principal owed on a home. That feature is designed for homeowners who have jobs but have lost income.

There are no specific household income limits for the program, but state officials say the amount and type of assistance will be limited to the hardest-hit families.

State housing officials have estimated about 5.5 percent of Michigan’s money will be eaten up by administrative costs.

Online:

Michigan State Housing Development Authority: www.michigan.gov/mshda