Help still is available for Marylanders at risk of losing their homes because they lost a job, their pay was cut or earnings reduced because of an illness.
But time is running out.
Homeowners facing foreclosure on their primary residence must get their applications into the state before 4 p.m. Sept. 16 to receive an interest-free, forgivable loan worth up to $50,000.
The money is intended to help delinquent homeowners get current on housing payments and assist with future mortgage bills for as long as two years. By then, it's assumed, homeowners should be back on their feet and able to keep up with their mortgage going forward.
"I have seen it where it pretty much has changed people's lives," says Stephanie Davis, managing counselor at St. Ambrose Housing Aid Center in Baltimore, one of a dozen counseling agencies helping the state process applications.
The federal government set aside $1 billion nationwide for such mortgage assistance. Maryland's Emergency Mortgage Assistance program, launched in April, received about $40 million to start. Based on Maryland's strong loan activity so far, the federal government recently awarded the state an additional $5.5 million for the program.
Raymond Skinner, secretary of the Maryland Department of Housing and Community Development, says nearly 800 homeowners have been approved for loans. With the extra money, the state is expected to make a total of 1,260 loans. The average loan so far is $33,000.
But while demand is high, so is the denial rate. Half of those applying are rejected because they don't meet the loan's qualifications, especially the income requirement, Skinner says. Income must have declined at least 15 percent.
"You also have to be able to show that after two years, you have a strong likelihood that you will be able to resume mortgage payments," says Rick Davis, executive director of the Eastside Community Development Corp., another agency that has been processing applications.
You can check out the terms of the loan and download an application online at mdhope.org. The site includes a checklist to help homeowners see if they qualify.
Among the criteria: You must be at least three months behind on your mortgage because your income has fallen due to a job loss, reduction of hours or medical condition. You must have received a foreclosure notice from your lender or loan servicer. You can't be in bankruptcy.
Other earnings restrictions: Total household income can't be more than 120 percent of the median income for your area. A single homeowner in Baltimore, for instance, must earn less than $69,050 to qualify, while a couple's income must be under $78,900.
If approved for a loan, the proceeds go first toward paying off any delinquent payments so the mortgage is current.
Going forward, you would be expected to chip in 31 percent of gross monthly pay toward the mortgage payment, with the loan program picking up the rest. This assistance can go on for up to two years or until the $50,000 loan cap is reached.
After that, 20 percent of the loan will be forgiven annually so that it's wiped out in five years.
But stop paying the mortgage or violate other terms of the loan, and you will be required to repay the money.
Davis, with Eastside Community, says the program was slow to get started, but once the word got out, applications soared. He expects his agency will process 165 applications by the deadline.
The loans are awarded on a first-come, first-served basis — so don't wait too long or the money will run out.
Some of the nonprofit counseling agencies assisting the state have stopped taking new applications. But homeowners can apply directly to Maryland's Department of Housing and Community Development.
To make sure you meet the deadline, Secretary Skinner suggests sending the completed application by overnight mail or dropping it off at the department's office at 100 Community Place in Crownsville. For more information, call 877-462-7555.