HFA Mortgage Assistance Programs
In early 2010, the federal government created the Innovation Fund for the Hardest Hit Housing Markets (Hardest Hit Fund), which provides funding to state Housing Finance Agencies (HFAs) so they can offer innovative measures to help homeowners in states hit the hardest by the housing crisis and economic downturn.
- Unemployment mortgage assistance programs provide mortgage payment relief by providing funds to help pay for part or all of the borrower's monthly mortgage payment.
- Mortgage reinstatement programs provide a one-time payment to bring a borrower's delinquent mortgage current.
- Modification assistance programs are intended to facilitate modifications by providing funds to assist in:
- Meeting housing expense-to-income ratio parameters or loan-to-value ratio requirements,
- Ensuring a more positive net present value result, or
- Paying arrearages and any other past due amounts advanced, including expenses (if applicable), and curtailing principal.
- Transition assistance programs are designed to help struggling homeowners transition into more affordable housing by receiving funds to assist in completing a short sale or deed-in-lieu, or assist with relocation costs.
Freddie Mac Servicers must respond to HFA requests and accept mortgage assistance program funds provided on behalf of borrowers with Freddie Mac-owned or guaranteed mortgages.
Each HFA is responsible for determining borrower eligibility criteria for financial assistance and will perform the underwriting of the borrower for the mortgage assistance programs.
Freddie Mac Servicers cannot solicit borrowers for any of the HFA mortgage assistance programs unless the HFA provides the Servicer express written permission. However, Servicers may refer potentially eligible borrowers to the applicable HFA in accordance to the HFA's requirements.
Once a Servicer is notified that a borrower is conditionally approved for mortgage assistance from a HFA, they must not refer the mortgage to foreclosure or schedule or conduct the foreclosure sale for 45 days. (Foreclosure actions are suspended unless the HFA notifies the Servicer the borrower has been determined ineligible for assistance.) Servicers must suspend the foreclosure referral or sale for a longer period of time if it is required by state law. Servicers may also postpone a foreclosure referral or sale exceeding 45 days if needed to facilitate the processing of mortgage assistance and receipt of funds, provided the Servicer follows up with the HFA on a regular basis to determine:
- Whether the borrower is still eligible for assistance
- When funds are expected
For specific requirements on interacting with and accepting funds from participating HFAs, refer to Single-Family Seller/Servicer Guide (Guide) Section 64.12, Hardest Hit Fund.
In addition to the reporting requirements outlined below, Servicers must submit a monthly report that outlines all the mortgages that received assistance under the HFA mortgage assistance programs in the prior month using the Spreadsheet for Hardest Hit Fund Mortgages.
The spreadsheet must be e-mailed to Freddie Mac by the fifth business day of each month for the prior month's activity.
Unemployment Mortgage Assistance Program
Within the first three business days of each month, Servicers must report all borrowers who entered into an unemployment mortgage assistance program agreement with a HFA in the prior month through electronic default reporting (EDR).
When reporting in EDR, use default action code "09 – Forbearance Plan" and default reason code "016 - Unemployment". Servicers must also include the date they were notified that the borrower entered into the HFA agreement.
Mortgage Reinstatement Program
Servicers must follow the reporting requirements outlined in Guide Sections A65.10, Reporting and Processing the Reinstatement, and 64.10, Monthly Electronic Default Reporting.
Modification Assistance Program
Servicers must follow the reporting requirements for a modification under Guide Chapters B65, Workout Options, and C65, Home Affordable Modification Program.
Transition Assistance Program
Servicers must follow the reporting requirements for all short sales and deeds-in-lieu in accordance with Guide Chapters B65, Workout Options, and D65, Home Affordable Foreclosure Alternatives.
- HFA Mortgage Assistance Programs Fact Sheet – Updated September 2012
- HFA Mortgage Assistance Programs Consumer Flyer
- Servicer Q&A – Updated September 2012
- Freddie Mac's Home Affordable Modification Program Web page
- Freddie Mac's Home Affordable Foreclosure Alternatives Initiative Web page
- Freddie Mac Standard Modification Web page
- Freddie Mac's Avoiding Foreclosure Resource Center
Are you a homeowner?
If you believe you qualify for one of the HFA mortgage assistance programs, please contact your state HFA. In the meantime, if you are having difficulty making your mortgage payments, contact the organization you make your mortgage payments. Read more about how to avoid foreclosure.