Homeowners' Emergency Mortgage Assistance Program / ACT 91

Foreclosure is a legal action taken by the lender wherein a homeowner could lose their home and all rights and privileges associated with homeownership. After a foreclosure action is completed, the owner no longer holds legal title to the residence and, in most cases, will be required to vacate the subject property.

• Homeowner must be at least 60 days delinquent on their mortgage and have received an Act 91 Notice – Appendix A (4/30/2016 through 4/2/2021) from their lender.
• The home must be located in Pennsylvania and must be owner–occupied.
• The property must be a one– or two–family residence. A home used primarily for business purposes is not eligible.
• Mortgage loans obtained primarily for business purposes are not eligible.
• FHA Title II loans are not eligible.
• The homeowner must have had a favorable mortgage credit history prior to the delinquency during the previous five years.
• The homeowner must be suffering financial hardship due to circumstances beyond their control.
  • Loss of employment due to layoff, strike or plant closing, serious medical problems, divorce, or separation are typically circumstances beyond one's control. On the other hand, quitting a job, committing a crime and being jailed, or money mismanagement are all examples of circumstances within one's control.
• The homeowner must have a reasonable prospect of resuming full mortgage payments within 24/36 months and paying the mortgage in full by maturity.
  • It is extremely important for the homeowner to do a complete self evaluation of their job history, job skills, and potential for securing future employment in order to present an accurate picture of whether or not there is a reasonable prospect of being able to resume mortgage payments within the required time frame.
• A HEMAP loan cannot exceed $60,000.00.
• A HEMAP loan cannot exceed 24/36 months from the date of the delinquency.
• PHFA/HEMAP must have at least a third lien position.

To be eligible for a HEMAP loan, a homeowner must be suffering financial hardship due to circumstances beyond their control. Loss of employment due to layoff, strike or plant closing, serious medical problems, divorce, or separation are typically circumstances beyond one’s control. On the other hand, quitting a job, committing a crime and being jailed, or money mismanagement are all examples of circumstances within one’s control.

Some circumstances which cause financial hardship are, by nature, temporary and predictable. A job layoff or temporary unemployment due to a curable medical condition are examples of circumstances which will clearly come and go, and the homeowner will be re–employed and be able to resume making their mortgage payments. The loss of a job usually creates a longer term problem; however, the homeowner’s job skills, training, job history, efforts at retraining, etc., are all relevant factors which the Agency will consider in determining whether there is a reasonable prospect of the homeowner being able to resume full mortgage payments within 24/36 months. If a person demonstrates a good employment history, a good credit history while employed, employable skills or efforts toward retraining, and an active search for employment, they will likely meet the reasonable prospect issue.

On the other hand, a person who has mortgaged their home to the limit, whose spouse dies without life insurance, who has no employable skills with no plans of entering into an employment training program, or who has a medical condition limiting their employment prospects, probably has little prospect of resuming their mortgage payments within 24/36 months and would likely not be found eligible.

It is extremely important for the homeowner to do a complete self evaluation of their job history, job skills, and potential for securing future employment in order to present an accurate picture of whether or not there is a reasonable prospect of being able to resume mortgage payments within the required time frame.

A listing of HEMAP approved counseling agencies should be included with the Act 91 Notice issued by the lender. If a Homeowner did not receive a listing of designated counseling agencies, they may contact the HEMAP offices at 717.780.3940 or 1.800.342.2397 for assistance in selecting an agency most convenient to them.

Please note the application process cannot begin without first receiving an Act 91 Notice. The only exceptions to this rule are mortgages held by USDA, Farmers Home Administration, or Rural Housing. These mortgages are not required to issue an Act 91 Notice, however those mortgagors may still apply for a HEMAP loan.

Mortgages which originated as FHA Title II, or are insured by the Federal Housing Administration under FHA Title II of the National Housing Act, are not eligible for a HEMAP loan. An Act 91 Notice is not required to be issued by the lender and the mortgagor may not apply for assistance without the Act 91 Notice.

The application process can take up to four months to complete. An applicant must meet (the Face–to–Face Meeting) with a designated HEMAP counseling agency within 33 days from the date of the Act 91 Notice (Act 91 Notice – Appendix A (4/30/2016 through 4/2/2021)) in order to begin the application process. The counseling agency compiles the appropriate information, prepares the application, and forwards it to HEMAP for processing. This must be done within 30 days from the Face–to–Face Meeting. During this time while applications are processed, foreclosure actions cease, as long as the procedural time limits are met.

Upon initial contact with the designated counseling agency to schedule the Face–to–Face Meeting, the applicant will be notified of the information they must bring to the meeting. The applicant must also prepare a Letter of Circumstance explaining the exact reason their mortgage is delinquent and include verification.

Lenders are not required to issue an Act 91 Notice if:

• The mortgage is insured under Title II of the National Housing Act (FHA Title II)
• The secured property is used primarily for commercial or business purposes
• The mortgage is more than 24/36 months delinquent
• The amount required to reinstate the delinquent mortgage exceeds $60,000.00

Lenders are not required to issue an Act 91 Notice if the property is:

• Not a one– or two–family owner occupied residence
• Not secured by a mortgage
• Not the principal residence of the mortgagor
• Not located within Pennsylvania

A mortgage held by a non–corporate seller is not eligible for assistance unless the non–corporate seller elects to issue an Act 91 Notice.  Once the Act 91 Notice is issued, the non–corporate seller becomes bound by the terms of the Act 91.

An Act 91 Notice is not required on a Rural Housing/USDA/Farmers Home Administration mortgage, but these mortgagors may apply with a delinquent notice from the lender, typically a Notice of Acceleration.

The Counseling Agency is under contract with PHFA to prepare an application for a HEMAP loan. The Counseling Agency does not make the decision to approve or deny HEMAP loan applications. They do not make any recommendations to PHFA as to whether or not a homeowner should receive a loan. Their job is to help homeowners present the most complete and accurate application possible. Applicants must provide all necessary information with their loan application. The circumstances that caused their financial hardship and the factors affecting their reasonable prospect of resuming mortgage payments must be explained in detail. Certain income and expense information must be documented. The Counseling Agency should offer suggestions which will help homeowners obtain the necessary information.

The Counseling Agency is prepared to counsel homeowners with their financial matters and spending habits. If appropriate, the Counseling Agency will attempt a forbearance agreement with the lender. The Counseling Agency should also provide information about other financial assistance or employment training opportunities in their community.

1. LETTER OF CIRCUMSTANCES – Please prepare and sign a detailed letter explaining the exact reasons for your current mortgage delinquency. Be as specific as possible since this letter is very important in determining your eligibility for loan assistance.
2. EVIDENCE OR DOCUMENTED PROOF OF CIRCUMSTANCES such as lay off notice, paid bills, medical or legal counsel statements, copies of cash receipts and/ or canceled checks for expenses that contributed to the mortgage delinquency.
3. ACT 91 NOTICE and any other Notices of Foreclosure.
4. Copy of Applicants' Driver's License or other valid photo IDs
5. Three most recent consecutive PAY STUBS for all working household members from all current places of employment.
6. VERIFICATION OF OTHER INCOME – Unemployment Compensation, Workers’ Compensation, child support, alimony, Public Assistance, Social Security, rent, pensions, etc.
7. EMPLOYMENT HISTORY – names, addresses, position title, income, and work dates of all employers where all applicants have worked over the past five years.
8. FEDERAL INCOME TAX RETURNS for the past three years (transcripts can be obtained by calling the IRS at 1.800.829.1040 and ask for Form 4506).
9. DEED TO PROPERTY FACING FORECLOSURE and any other real estate owned (this information can be obtained from your County Courthouse).
10. MONTHLY STATEMENTS of all loans and charge accounts.
11. Proof of REAL ESTATE TAXES (if not escrowed by your lender). Copies of tax bills can be obtained from your county and township government offices.
12. HOMEOWNER’S INSURANCE POLICY showing annual premium amount (can be obtained from Insurance Agent).
13. CHECKING & SAVINGS ACCOUNT STATEMENTS verifying balances.
14. VERIFICATION of stocks, bonds, retirement accounts, IRA’s, 401(k)’s, cash value of life insurance policies, etc.
15. UTILITY BILLS – Copies of three summer and three winter bills (contact utility company if necessary).
16. SOCIAL SECURITY NUMBERS for all applicants.
17. MORTGAGE YEAR END STATEMENT and a copy of a coupon from the mortgage payment book.
18. AN EXPLANATION of how the homeowner intends to increase income to the point necessary to resume and maintain full monthly mortgage payments.

After the homeowner meets with the designated counseling agency, the counseling agency notifies the lender of the meeting (Appendix B – Counseling Agency Notice to Lenders), and mails out all verifications (to include deposit and mortgage). The counseling agency then packages the information gathered from the homeowner/applicant along with the completed application and forwards the package to PHFA/HEMAP in Harrisburg. To remain timely, the application must be submitted to PHFA within 30 days from the date of the Face–to–Face Meeting.

Upon receipt, the Agency notifies the applicant and the lender in writing that the application has been received. HEMAP personnel then review the application to determine a Homeowner’s loan eligibility. A decision is made within 60 days from the receipt of the application by HEMAP. Applicants and lenders are notified in writing of the decision.

A homeowner must attend a Face–to–Face Meeting with a designated Counseling Agency within 33 days of the date of their Act 91 Notice. The Counseling Agency must forward the application to PHFA within 30 days from the Face–to–Face Meeting date. PHFA has up to 60 days from the date the application is received to make a decision.

Approved applications usually move to a loan closing within 60 days from approval date; however, this time frame is dependent upon lenders and tax offices providing timely responses to HEMAP’s requests for information. At loan closing, appropriate loan documents are signed by the homeowners along with a mortgage which is recorded against the property. Following the loan closing, payments are made to the lenders to bring the delinquent mortgage payments and any outstanding real estate taxes current.

All homeowners who receive HEMAP loan assistance must complete a recertification for their assistance loan at least annually. Recertification is a requirement of the program where the loan recipient must update their financial situation. The loan recipient must report all current income along with information concerning their mortgage loan(s), any changes in household employment, any changes in their household circumstances and utility expense. Any adjustment in the homeowner’s repayment/contribution, deemed necessary by the Agency, is made at the time of the recertification.

Recipients of HEMAP loans are also required to notify the Agency in writing of any changes in their financial status throughout the life of the loan as they occur, not just at recertification times.

HEMAP’s loan is recorded in the Recorder of Deeds office in the county where the assisted property is located as a mortgage lien against the homeowner’s property.

Loan recipients of a non–continuing loan must begin repayment immediately following loan closing. Repayment is set based on income, but must be at least $25.00 per month per mortgage assisted. Twenty–five dollars is the minimum payment amount allowed by law. The payment amount is reviewed at least annually during the recertification process and may by adjusted at that time. Any increase in the payment amount in excess of the $25.00 level is based on 35/40 percent of a homeowner’s net monthly income less their total monthly housing expense. Total housing expense is the sum of the mortgagor’s monthly mortgage payments, including escrows, utility costs, hazard insurance expenses, real property taxes and, in the case of cooperatives and condominiums, the monthly amount the unit is assessed for the maintenance of common elements.

Homeowners must seek repayment or refinance of their mortgage once they have established better credit and equity in the property. Loan recipients of a continuing loan must begin repayment immediately following termination of continuing loan disbursements.

All HEMAP loans are reviewed at least once a year to recertify a homeowner’s eligibility based upon financial information and other circumstances. If homeowners are receiving a continuing loan, the recertification process will determine if PHFA loan disbursements should continue, increase, decrease, or stop. If continuing loan disbursements are discontinued, the amount of HEMAP loan repayment is determined at this time. Failure to cooperate with the recertification process will result in termination of loan disbursements and/or trigger a demand for full payment. The recertification process will occur each year until the loan is paid in full. This process is handled through the mail; therefore, it is extremely important that PHFA be notified of any change in mailing address.

If circumstances change at any time during the life of the HEMAP loan, homeowners must notify this Agency of the changes and request a re–evaluation of their loan. A request for a reevaluation must be in writing and documentation supporting the change in circumstances must be included with the request. New employment, loss of employment, high medical expenses, large home maintenance expenses, any increase or decrease in household income are all reasons to request a re–evaluation.

If a loan application is denied, applicants have the right to request an administrative appeal hearing. The request must be made in writing and must be postmarked within 15 days of the date of the letter denying HEMAP assistance. Hearing examiners, who are separate and distinct from the staff making the initial loan decision, schedule and conduct hearings to weigh the facts and circumstances and determine if the initial decision should be affirmed (remains a denial), reversed (becomes an approval), or remanded (sent back to the Loan Evaluations staff for further review).

If you truly are not eligible to receive a HEMAP loan, you can also explore the other alternatives to avoid foreclosure with your lender.

PHFA HEMAP Staff may also be contacted by phone or by mail as follows:

General Information: 717.780.3940
Toll Free: 1.800.342.2397
Hearing Impaired: 717.780.1869
Fax: 717.780.3995
E–mail: HEMAP

Mailing Addresses:

Payments
PHFA/HEMAP
PO Box 15206
Harrisburg, Pennsylvania 17105–5206

Correspondence
PHFA/HEMAP
PO Box 15530
Harrisburg, Pennsylvania 17105–5530

Overnight Delivery
PHFA/HEMAP
211 North Front Street
Harrisburg, Pennsylvania 17101–1406