• 09
  • March
    2011

In recognition of Tennessee's high unemployment rate, the federal government has extended the benefits of the Hardest Hit Fund program to Tennessee homeowners. With the goal of helping homeowners avoid mortgage default and home foreclosure, the program will deliver almost $200 million to Tennessee counties, which will then distribute the funds to local homeowners who are able to show that they are in need of mortgage assistance.

Administered by the Tennessee Housing Development Agency (TFDA), the program will allow homeowners to apply for funds to cover up to 18 months of mortgage payments, or up to $20,000 depending on the homeowner's county of residence. Loans may also be used to pay past-due mortgage payments, as well as property taxes, homeowner insurance and association fees.

One of the best features of the program is that the loans come with a zero percent interest rate and that they are forgivable. This means that if homeowners meet the program's requirements, they will not have to repay the government for the loans.

Homeowners who have become unemployed or underemployed, with income reduced by at least half, and who are unable to make mortgage payments will qualify for the program. There are a few caveats, such as that unemployment or underemployment must have started on or after January 1, 2008, and homeowners must have a record of timeliness of mortgage payments until unemployment. In addition, the homeowner's annual income must be less than $75,000, and the mortgage payment must be greater than 31 percent of household income. Additional program requirements are detailed on the Tennessee Hardest Hit Fund website.

Source: Information for the Hardest Hit Fund