Form of Financial Assistance

Our assistance is provided in the form of no-cost, zero-percent-interest, deferred loans. These are also called deferred forgivable loans. These are loans in which the entire principal and interest payments are deferred to a future date, with terms to forgive the entire repayment amount. The loan is forgiven incrementally, depending on the program. For example, a 5-year loan is forgiven at the rate of one-fifth (20%) of the loan each year over five (5) years until the end of the repayment term. At the end of the term, the repayment amount is reduced to zero, and the recipient has paid a total of zero dollars.

Ownership & Occupancy Conditions

The recipient must maintain the property as their primary residence for the full repayment term. For example, if a recipient’s loan period is five (5) years, the recipient must continue to live in the home for five (5) years. If the recipient sells the home within the repayment period, a certain portion of the loan will need to be repaid. In most cases, selling the home “early” is the only circumstance in which a recipient will be expected to repay a portion of the loan.

Understanding Loan Documents

Our loans are secured using standard financial tools commonly employed in lending agreements. When homeowners receive our assistance, they will sign either a “Promissory Note” or a “Deed of Trust”. These documents establish a security interest on the property by the lender, with the homeowner’s agreement. This arrangement gives us the right to collect money from the sale of the property if it’s sold during the agreed-upon repayment period, as explained earlier. This security interest is something both the homeowner and the lender agree upon together, much like a mortgage.

Typically, the security interest stays in effect until the homeowner satisfies their obligation to the lender. In our programs, this obligation is considered satisfied once the repayment period ends, and the repayment amount has been reduced to zero. At that point, the loan is forgiven, and the security interest is removed from the property. This means you won’t owe anything more, and your property is free and clear.

Why do we secure loans in this manner? There are two main reasons. First, it’s a requirement of the government agencies that provide funding for our programs. Second, and perhaps even more crucially, it serves as a safeguard to direct financial assistance toward homeowners in genuine need, rather than allowing it to benefit property investors, “flippers”, or individuals who would seek to profit by quickly selling a newly rehabilitated home.

By requiring homeowners to continue living in the home for the repayment period, we ensure that funds are provided to those who genuinely require the help to maintain their homes in a comfortable and safe condition. This condition ensures that the aid serves its intended purpose - supporting homeowners who might otherwise face substantial difficulties in maintaining their homes, potentially facing displacement.

Government Oversight & Safeguards

Our programs can offer such favorable terms because our funding comes directly from federal, state, and local government sources. These funds are specifically allocated to assist homeowners facing critical needs, not to generate profits from loan repayments.

To ensure protection for homeowners like you, our programs operate under rigorous legal frameworks and are subject to thorough government oversight. This means that laws, regulations, and guidelines are in place to safeguard your interests.

Government agencies carefully monitor our programs to guarantee they stay true to their mission of assisting homeowners without causing financial stress. This oversight guarantees that the assistance you receive is fair, transparent, and designed to alleviate the burdens associated with homeownership.