Nevada’s Hardest Hit Funds

Nevada was awarded more than 150 million dollars to use through the new “Hardest Hit Fund” program.  This program has been designed to be compliant with the Emergency Economic Stabilization Act. The Nevada Affordable Housing Assistance Corporation (NAHAC) has been approved by the U.S. Treasury to create a business plan and oversee the desperately needed program.

The intention of the program is to assist homeowner’s avoid foreclosure through four different programs with specific homeowner needs and situations at the forefront.  This program hopes to assist about 22,000 Nevada Homeowner’s who are in danger of losing their home due to a recent hardship.

The four separate programs can be used by the at risk homeowner, either alone or in combination, depending on their mortgage and financial situation.  There are eligibility requirements, the basic guidelines are:

1. Purchased home before January 1, 2009
2. Owner Occupied home  *see below
3. Legal U.S. resident
4. Currently own only one (1) property
5. Experienced a financial hardship since 2008 **see below
6. Facing Imminent default
7. Maximum income of 120% Area Median Income ***See NHHF AMI Table
8. Current mortgage of  $427,184.00 or less (Clark County)

*Owner occupied means borrower or co-borrower live in the home OR moved less than 6 months ago due to a short sale in process.

** Financial hardship can include:
o Unemployment
o Reduction of income
o Illness – Must be document able
o Disability – Disability cannot be the only source of income of homeowners
o Death of a wage earner  (2008 or more recent)
o Divorce or Legal Separation (2008 or more recent)
o Increased Expenses – monthly mortgage increased/is about to increase
AND homeowner as at least one of the following:
o Unemployed, underemployed
o Have high medical/healthcare costs
o Uninsured losses (fire/natural disasters)
o Increased property taxes
o Cash Reserves – Not enough to maintain the mortgage payment and cover basic living expenses at the same time.  This includes all assets, ie: cash, money market funds, savings, marketable stocks or bonds.

ALL the programs have additional eligibility requirements AND are only available to homeowners whose mortgage servicing company agrees to the terms and conditions governing the use of these funds.

The four programs offered through Nevada Hardest Hit Fund® are:

Mortgage Assistance Program (MAP)

This program is intended to provide temporary financial assistance for underemployed and people who experienced a loss of income and or unemployment.  The program will pay 1/3 of the principal and interest portion of homeowner’s monthly mortgage payment, up to $500.00 per month for up to 6 months.  Borrowers will submit their partial payment to the Nevada Affordable Housing Assistance Corporation (NAHAC) where it will be combined with the HHF funds and a full remittance made to the loan servicer for the loan.  MAP payments will invoke a non-recourse lien which will have an earned forgiveness embedded in the note.  Borrowers who are able to sustain their home ownership for 60 successive months (5 years) after using the MAP program payments will have their lien extinguished.  An additional one-two month’s of assistance is available for exceptional cases, which must be approved by the NAHAC Board of Directors.  Funds through this program cannot be used to make up any past due payments or penalties.

If the participant utilized this program, but fails to remit their portion of the monthly mortgage payment they will be dropped from the program.  If it appears evident that the homeowner may lose their home due to lack of means to sustain the mortgage, the homeowner will be advised about the short-sale acceleration program and can opt to utilize that program.

MAP program assistance will be in the form of a 0% interest, forgivable, non recourse loan, secured by a recorded lien against the property and forgiven over a 5 year period at the rate of 20% per year.  The loan will only be repayable if the homeowner sells the property before the 5 year time frame, and there is sufficient equity to pay the loan.

Additional Eligibility requirements include a signed affidavit of financial hardship attesting to their inability to make mortgage payments.

Program Exclusions:
• If you have failed a HAMP loan temporary period by voluntarily not complying.
• If you own any other real estate

Principal Reduction Program

Homeowner’s can receive a principal reduction of up to $50,000.00.  Nevada’s Hardest Hit Funds will contribute $25,000.00 and the participating Servicer (your mortgage company) matches that contribution up to 100%.  This is a permanent change to the mortgage and is designed to help at least 3000 homeowner’s to reduce their loan to value ratios to 115%or less which would reduce their PITI (payment, interest, taxes, insurance) to between 38-43% or less of the homeowner’s gross income.

This program assistance will be in the form of a forgivable, secured by a recorded lien against the property and forgiven over a 5 year period at the rate of 20% per year.  The loan will only be repayable if the homeowner sells the property before the 5 year time frame, and there is sufficient equity to pay the loan.  In the event that the recipient utilizes the short-sale acceleration program after receiving assistance from this Principal Reduction Program, the lien recorded on the property may be extinguished.

Additional Eligibility Requirements include:
• Must have only one mortgage (no second liens)
• Principal balance must not exceed 115% based on valuation obtained by NAHAC or the mortgage holder following the principal balance reduction.  (PITI not to exceed 38%)
• Mortgage cannot be secured by FHA/VA, Fannie Mae, Freddie Mac UNLESS all direct lender program options have been exhausted.

Program Exclusions:
• If you have failed a HAMP loan temporary period by voluntarily not complying.
• If you own any other real estate

Short-Sale Acceleration Program

Designed to help homeowner’s who need to initiate or are currently doing a short sale of their home. This program can help the homeowner by offering incentives to the lender and other parties involved, and also provide up to two months of rent to the homeowner, easing the transition from owner to renter and relieving the burden of a mortgage that they are unable to sustain, even with a material loan principal reduction.  This program will build on or utilize the H.A.F.A. program in parallel.  If it is possible to utilize both the federal H.A.F.A. program funds underneath the Short-Sale Acceleration Program funds, which can increase the number of possible candidates assisted through the short-sale process.

Funds for this program are paid to lender and other parties directly at the close of home sale transaction and are not structured to be a loan, no repayment is required.

Additional Eligibility Requirements include:
• Must have short-sale approval in place with lender.
• Must have home listed for sale and listing agreement
• Provide a financial Hardship Affidavit attesting to their inability to make mortgage payments
• Have been through a HAMP or loan modification process and “failed” by a sufficiently material level so as not to qualify for NAHAC’s first mortgage Principal Reduction Program. Meaning the only factual and realistic result for the homeowner is the short-sale.
• Homeowner must live in the State of Nevada, signing a rental lease for 6 months or more at the close of the home sale transaction.

Program Exclusions:
• Borrowers doing a short sale but unwilling/unable to stay in Nevada due to job opportunities elsewhere
• If you own any other real estate

Second Lien Relief Program

This program is here to assist homeowner’s who have a second mortgage that may be interfering with the refinance, short sale or modification of a first mortgage.  This program can extinguish the second lien and the homeowner will be released from this debt completely.  This program can be used in conjunction with other NAHAC programs. All second liens obtaining relief through this program will have an accompanying lien release and waiver of deficiency judgment rights. The maximum second lien amount for this program is $41,250 UNLESS the lien holder agrees to write down a greater balance.  Typically, in a short-sale situation, the second lien is given much less as a settlement (1,000.00 to 3,000) but sometimes reserves the right to the deficiency.  The maximum contribution using this program is $16,500.00.  This gives a much better leveraging tool in negotiating the second for release.

This program will be structured as a forgivable loan. Participants who follow through and earn the loan forgiveness will not be required to repay their principal reduction loans.  The loan has a term of 5 years and is forgiven at a rate of 20% per year with full forgiveness at the end of the 5th year.  If the homeowner sells the property before the forgiveness period, all net proceeds from the sale up to the full balance not yet forgiven will be due and payable to NAHAC.  If the program participant moves through the short-sale process utilizing NAHAC’s Short Sale Acceleration Program, the lien recorded as a result of participation in this program may be extinguished.

The purpose of this program is to “free up” the first mortgage note holder to complete a loan modification or refinance to keep the homeowner current and in their home.  Participating lenders will need to contribute a minimum of $0.60 for each $0.40 contributed by this program UNLESS the second lien is held by a down-payment assistance program provider, then no matching contribution shall be required.

Additional Eligibility Requirements include:
• Must have only one existing  mortgage and a second lien
• PITI (payment, interest, taxes, insurance) cannot exceed 38-43% after removing the second lien.

Program Exclusions:
• If second lien exceeds the maximum contribution limit and the lien holder does not agree to accept the terms and amount of the contribution
• If you own any other real estate

Contact Us 702-677-8796

 Principal Reduction Program

Mortgage Assistance Program (MAP)

Second Lien Relief Program

Short-Sale Acceleration Program