Homesafe Program

HOMESAFE GEORGIA PROGRAM

The United States Department of Treasury (Treasury) established the Hardest Hit Fund® (HHF) program in February 2010 and approved the HHF® plans for Georgia on September 23, 2010. The purpose of the program is to help Georgia homeowners who have experienced a substantial decrease in income due to job loss or underemployment by providing a mortgage payment bridge while they seek new or better employment. The Georgia Department of Community Affairs (DCA), under contract with Georgia Housing and Finance Authority’s GHFA Affordable Housing, Inc. will administer Georgia’s HHF® program, as HomeSafe Georgia.

For more information about Treasury’s HHF®, visit
http://www.financialstability.gov/roadtostability/hardesthitfund.html.

DCA’s HomeSafe Georgia pilot program ran from December 15, 2010 to March 31, 2011 and allowed DCA to review HHF® procedures to ensure completeness, accuracy, and compliance with Treasury’s requirements. The HomeSafe Georgia Program launched on April 1, 2011 and will continue until December 2017 or until the allocated funds are exhausted.

HomeSafe Georgia’s goal is to provide assistance to over 18,000 homeowners to prevent foreclosures. The Program is designed help homeowners who are unemployed, significantly underemployed, or self employed with a significant loss of income, by providing Mortgage Payment or Reinstatement Assistance. Eligible homeowners approved for the Program will close on a subordinate loan similar to a home equity line of credit. The loan will be at 0% interest. Following the assistance period, the loan will be forgiven at a rate of 20% per year for five years.

Under Mortgage Payment Assistance, the homeowner’s monthly mortgage payments are paid to the lender for up to 18 months for first and second mortgages. Up to 6 months of delinquent payments and fees will be reinstated upfront, with the balance of the 18 months provided in monthly assistance. (Example: If your mortgage is current, up to 18 months of payment assistance; if your mortgage is 6 months delinquent, HomeSafe Georgia would reinstate the 6 months, leaving up to 12 months for monthly assistance.)

Funds reserved for first and second (where applicable) mortgages are listed as one amount on the Note, but the funds are separate and cannot be otherwise used.

The homeowners’ gross household income will be reviewed; a partial payment amount of 5% of the income will be required from the homeowners and will be used toward the mortgage payment. The number of partial payments will match the number of monthly mortgage assistance payments, although due to timing, the partial payment is always one month behind. The partial payment will decrease the amount of assistance used. Any funds remaining once participation ends can be used for an additional backend reinstatement, if needed. Veterans and those currently serving in the military can request a waiver of the 5% partial payment.

Borrowers must recertify eligibility on a quarterly basis. Borrowers who obtain new or better employment during participation are eligible for up to two additional assistance payments to the lender, if reserved assistance funds remain.

Failure to recertify, failure to pay partial payments when required, and filing a petition for bankruptcy are some, but not all, reasons for termination from the Program. No further assistance would be available.

Reinstatement Assistance is for homeowners whose hardship has since ended but need help catching up payments that became delinquent during the hardship. A one-time payment is paid to the lender comprised of up to 6 months of missed mortgage payments, forbearance differentials, and lender fees in arrears, not to exceed the equivalent of 18 payments.

Homeowners who are interested in applying for a HomeSafe Georgia loan should review eligibility requirements (“Eligibility Requirements” tab) and check to see if their lender is participating (“Lender Participation” tab) in the Program.

Applicants will fill out their loan applications on HomeSafe Georgia’s website. Applicants who do not have a computer at home may have access to a computer at their local library, community center, or unemployment office. Contact HomeSafe Georgia if you do not have access to a computer or if assistance is needed in completing the application. The application package must be downloaded, printed, completed and submitted to HomeSafe Georgia for consideration.

In order to efficiently serve the most homeowners, the HomeSafe Georgia Program may require that the application process be unavailable on certain dates; this will be noted on the Homepage when possible.

Additional information regarding the HomeSafe Georgia Program may be found under Frequently Asked Questions (“FAQ”). Have other questions regarding the program? Contact Customer Service at 1-877-519-4443 or via email at hhf@dca.ga.gov.

Borrowing Guidelines

There are two types of mortgage assistance available under the HomeSafe Georgia Program*.

1. Payment Assistance- Up to 18 months of first and second mortgage payments are paid directly to your lender(s). The equivalent of up to 6 monthly payments can be paid in an upfront reinstatement, with remaining assistance on a monthly basis going forward. If payment assistance is not needed for the full 18 months, the remaining loan proceeds may be used to pay any additional mortgage delinquencies in a backend reinstatement. Any remaining proceeds will be returned to the Program to provide assistance to other borrowers.

2. Reinstatement- During the hardship: Up to 6 months of missed first and second mortgage payments, forbearance differentials, plus lender fees are paid in a one-time payment to your lender. The total amount cannot exceed the equivalent of 18 regular payments.

“Up to” is the reserved amount, the maximum amount of the loan, and does not guarantee the full amount will be paid or that your loan will be current when you complete the program. “Mortgage payment” is the regular scheduled payment amount including any mortgage related escrowed fees. Assistance is limited to one time per applicant or household for the duration of the Program.

HomeSafe Georgia must reserve the funds per borrower; therefore, the maximum loan amount will be listed in the Promissory Note, but the HomeSafe Georgia lien will be balanced to the amount of monetary assistance used.

To figure your maximum amount of loan, choose the assistance that fits your needs:

Payment Assistance

Your monthly payment $________________ x 18 = $ _______________ Maximum loan amount (amount reserved)

Months assisted: 18 months - delinquency ___________ (up to 6 payments) = up to ___________ months assistance

Reinstatement

Your monthly payment $_____________x missed payments (up to 6) $_____________ + $_____________ forbearance differential + $_____________estimated lender fees = $_______________ Approximate maximum loan amount

*Applicants and property must meet all eligibility requirements.

Annual Percentage Rate

The HomeSafe Georgia loans are 0% interest, 0% APR.

Fees

No fees are charged to the applicant for the HomeSafe Georgia loan. Fees associated with the loan are charged to the HomeSafe Georgia Program.

Borrowing and Repayment Terms

The HomeSafe Georgia loan is forgiven after five years from 30 days after the last date of assistance, with a forgiveness rate of 20% each year. This means that if the applicant remains in the home for five years and 30 days after assistance is completed, the lien balance is $0.

For example, if the last assistance payment paid on behalf of the Borrower was made on January 1, 2012, then the first day of the Forgiveness Period is February 1, 2012, and the Principal Amount would be reduced as follows:

Date of Reduction	Dates for Above Borrower Example. (Your dates would be different.)	Amount of Total Principal (Assistance Amount Used) Reduction	Principal Amount (Assistance Amount Used) Remaining Due as of Date of Reduction
Prior to one year		0%	100%
End of year 1	February 1, 2013	20%	80%
End of year 2	February 1, 2014	20%	60%
End of year 3	February 1, 2015	20%	40%
End of year 4	February 1, 2016	20%	20%
End of year 5	February 1, 2017	20%	0%

The chart is important to understand in case there is a “Payment Event” that would trigger the principal amount to be due prior to the end of the forgiveness period. Payment events are listed as: borrower selling or no longer residing in the property; transfer of property; borrower files a bankruptcy petition; borrower is terminated from the program by HomeSafe Georgia; or HomeSafe Georgia declares a default under the Note or Security Deed.

For example, if the Borrower above received $20,000 in assistance and sold his/her home on January 15, 2015, the lien balance of $12,000 (60%), would be due at closing. For sales, contact HomeSafe Georgia for payoff amount.

For a refinance, HomeSafe Georgia will re-subordinate the lien if requested and if procedures are followed. A refinance will immediately terminate the assistance for any borrowers still under HomeSafe Georgia participation.

Payments

The borrower is not required to make payments on the HomeSafe Georgia loan, but may choose to do so without any penalty. A Payment Event could trigger the balance to be due.

The borrower may be required to make partial mortgage payments. These payments are combined with the assistance payments to the lender and will reduce the amount of provided assistance and lien balance, but are not payments directly for the HomeSafe Georgia loan.

Risks

· A Security Deed is issued and a lien remains on the property until forgiven or satisfied. This is a debt.

· Payment Events, including failure to maintain eligibility, can trigger the lien balance to be due on demand.

· You will not be able to claim mortgage interest on the amount of assistance provided to your lender/servicer on your behalf by HomeSafe Georgia. Contact your tax consultant for more information.

Understanding the HomeSafe Georgia Loan

Ø Not everyone will qualify. Please refer to eligibility requirements.

Ø If approved, you are under no obligation to accept this loan.

Ø HomeSafe Georgia assistance can conflict with some lender programs. Please discuss options with your lender if you are considering this assistance and lender assistance.

Ø Ask questions if you do not understand any part of this program.