How To Get Help for Veterans Facing Foreclosure
There are currently over 37,000 homeless veterans in the United States. Many of these brave men and women are homeless because they could not afford to buy a home, or they fell behind on their mortgage payments and fell victim to foreclosure.
If you are a veteran and you are underwater on your mortgage payments, you have options. Whether you want to try to save your home or sell it and find alternate housing, you do not have to face this problem alone. There is help for veterans facing foreclosure. Contact a New York Foreclosure Attorney today for a free consultation and to learn about your options.
How to Apply for Veteran Grants
Veteran grants may be a way for veteran homeowners to seek relief during tough financial times. Grants are often available through the federal and state governments, national and local nonprofit organizations, churches, and private organizations.
Grants from the Government
The Department of Veterans Affairs (VA) offers several types of grants and assistance programs for veterans and their families to buy homes and refinance or modify mortgages. Veterans can also seek government grants from the state or local government where they live.
If you live in New York and need housing help for veterans facing foreclosure, you can see what government grants are available here.
Grants From Charities
There are hundreds of charities across America that focus on assisting veterans. Many of these charities work specifically to ensure that veterans have safe and reliable homes.
Homes for Our Troops is one organization that builds mortgage-free handicap-accessible homes for injured veterans returning home from Iraq and Afghanistan. This organization also modifies current homes to be handicap accessible to fit veterans’ needs.
Since it was started in 2004, Homes for Our Troops has built over 170 homes and has fifty more homes under construction.
Many veterans fall behind on their mortgage payments while receiving treatment for their injuries. This can be scary for family members who rely on that housing. The Fisher House Foundation provides veterans and families with no-cost housing while a veteran receives treatment.
You can reach out to your local VA for more information on charities that provide help for veterans facing foreclosure and homelessness.
Grants From Churches
Religious organizations and churches are other resources that may provide housing help for veterans facing foreclosure. Religious organizations all over the country have programs that help veterans with obtaining food, paying bills, and avoiding foreclosure and homelessness.
Catholic Charities is one of America’s largest providers of affordable housing for veterans. They have over 35,000 established units and can house veterans and their families through difficult financial times and foreclosure proceedings.
Grants From Private Organizations
In addition to government, charity, and church grants, many private and nonprofit organizations also have programs to provide help for veterans facing foreclosure.
The Home Depot has a foundation that offers veteran housing grants to nonprofit organizations for the purpose of building or renovating houses for veterans.
Types Of Veteran Home Loans
There are two types of veteran home loans: VA-back home loans and non-VA-backed loans. The type of loan determines how much the VA can intervene and assist a veteran with loan defaults and mortgage payments.
Veterans With VA-Guaranteed Home Loans
A VA-Guaranteed home loan, also called a VA-backed loan or VA direct loan is a VA loan that allows veterans to buy, build, renovate, or refinance a home. A veteran will still need to have the required credit score and income to purchase a home, but a VA loan usually offers better terms than a traditional loan.
With a VA-guaranteed home loan, veterans can benefit from:
- No down payment (subject to specific lenders)
- Low-interest rates
- Limited closing costs
- No Private Mortgage Insurance (PMI) is necessary
If a veteran falls behind on a mortgage backed by a VA loan, they first need to contact their loan servicer, who is responsible for loan defaults. If the servicer cannot resolve the issue, the veteran can seek assistance from a VA loan technician. If a VA-guaranteed loan is over 61 days past due, a loan technician is automatically assigned to the loan. Loan technicians provide help for veterans facing foreclosure.
Veterans with Non-VA-Guaranteed Home Loans
A non-VA-guaranteed home loan is simply a conventional mortgage from a lender or an FHA loan. Unfortunately, the VA cannot intervene on a veteran’s behalf if they fall behind on these mortgage payments.
Veterans who default on their loans should contact the loan servicer as soon as possible then reach out to an attorney who is experienced with foreclosure proceedings.
A New York foreclosure lawyer can guide you through the foreclosure process, educate you about your options, and help you make the best decision for your future.
Loss Mitigation Options for Veterans
There are several loss mitigation options available for veteran homeowners to avoid foreclosure. In fact, the VA encourages loss mitigation by offering incentives to lenders, like paying a lender for each loss mitigation method used.
Loss mitigation is used when a veteran wants to avoid foreclosure and keep their home.
Repayment Plans
Repayment plans are good options for veterans who have missed a couple of mortgage payments and want to get back on track with their lender.
Under a repayment plan, you can negotiate a deal to pay back the lender for the missed mortgage payments. These payments are separate and in addition to the monthly mortgage and are made towards the missed payments. Repayment plans often include any late fees or accrued interest for the missed payments.
Special Forbearance
If you are experiencing financial hardship, a VA loan may allow you extra time to repay missed mortgage payments under a special forbearance program. If you qualify for this type of loss mitigation, the lender will suspend mortgage payments without penalty. This can give people who are under water on their bills valuable time to catch up.
To qualify for special forbearance, you typically must prove that you will be able to make payments in the future. This program is good for people who are waiting on a big tax return or in the process of a loan modification.
Banks that are associated with the VA will usually consider special forbearance because the VA encourages loss mitigation options for veterans. If you want to see if you qualify for special forbearance, you can contact a VA loan technician.
Modifications
A loan modification is when homeowners negotiate new terms with their mortgage lender. If you have defaulted on your loan because the monthly cost is too high, a modification may allow you to refinance your mortgage to a rate that is within your budget.
For example, a lender may modify a twenty-year loan to a thirty-year loan to reduce the monthly mortgage payment. The lender can also include missed payments, legal fees, and penalty fees with the new balance. It is important to remember that under a modification, a borrower will end up paying more in interest over the long term.
Refunding
Refunding is an alternative loan modification in which the VA buys your mortgage from a lender. This allows a veteran to avoid foreclosure and make payments directly to the VA instead of the bank.
Types of Foreclosure Assistance Programs for Veterans
Housing and Urban Development (HUD)
The Department of Housing and Urban Development (HUD) has programs that help veterans facing foreclosure through the HUD Veteran Resource Center (HUDVET). Veterans can access HUD homeless assistance programs and specialized services if they are facing foreclosure.
The HUD also provides veterans with information on other federal programs like domestic violence programs, community and economic development programs, and services for people with disabilities and the elderly.
Public Housing Authority
The Public Housing Authority (PHA) is a branch of the Department of Urban Development. PHA can provide veterans with information and assistance for housing programs like housing choice vouchers.
For information about programs available through the HUD or the PHA, veterans should contact their local office.
Federal Deposit Insurance Corporation (FDIC)
The Federal Deposit Insurance Corporation (FDIC) offers a home purchase loan program to veterans that are backed by the VA. This program has made home loans available to many veterans who would not have qualified for traditional mortgages.
Under the Home Purchase Loan, every veteran has a guarantee entitlement minimum of $36,000. This is the amount that the VA will pay a lender if a veteran is facing foreclosure.
The amount that a veteran is qualified for will vary depending on several factors like military category, whether this is the first loan or not, and whether the veteran plans to make a down payment on the home.
National Consumer Law Center
The National Consumer Law Center (NCLC) is a nonprofit organization that specializes in consumer issues on behalf of low-income Americans. The NCLC supports policies that promote homeownership and access to affordable and fair mortgages.
Veterans can stay up to date on new policies and programs through the NCLC website.
Local Programs
Most states and cities have local programs that benefit veterans and provide housing help for veterans facing foreclosure. In New York, the New York State Division of Veterans Services is an agency that advocates for veterans and their families.
Veterans can contact their local division of Veterans’ services for more information about local programs and charities that benefit veterans.
Help For Disabled Veterans Facing Foreclosure
Veterans Disability Benefits
Disabled veterans who have a service-related disability qualify for additional services that can help when facing tough financial times or a home foreclosure. Disability benefits are tax-free and can range from $133 a month to over $3,400 a month. Additional benefits are paid if a veteran meets the following criteria:
- Severe disability or loss of limbs
- You have a spouse or dependents
- You have a disabled spouse
- You are unemployable because of your disability
The VA also provides help for 1970s veterans facing foreclosure through programs for veterans with age-related disabilities. These individuals may qualify for special housing grants or programs.
VA Guaranteed Loans
Disabled veterans are also eligible for VA-guaranteed loans. These are loans from private lenders that the VA guarantees or backs on behalf of the veteran. VA loans allow veterans to access better terms and additional benefits that traditional mortgages don’t provide.
In addition to better terms and benefits, veterans also have access to financial counseling and loan technicians who can assist them and give advice about budgets, bills, loan defaults, and government programs and grants.
Subprime Refinancing
If a veteran has suffered financial hardship and has a low credit score, they may have fallen victim to a subprime mortgage. A subprime mortgage is a very high-interest mortgage that is offered to borrowers who don’t qualify for traditional mortgages.
The VA has a program that allows veterans to refinance their subprime mortgage to a loan with a lower interest rate. To be eligible for subprime refinancing, veterans must meet the following criteria:
- Must not have defaulted on an existing mortgage
- Home must be worth as much as the borrowed amount
Under the Veterans’ Benefits Improvement Act of 2008, the loan refinancing maximum was increased to over $500,000 in some areas. This allows veterans with homes in all price brackets to benefit from these helpful services and programs.
The Department of Veterans Affairs website offers additional information about help for veterans facing foreclosure and federal and state programs and grants available to veterans.
Getting Help for Veterans from Foreclosure Right Now
If you are a veteran and you are facing a foreclosure, there is help for you. There are a variety of resources available to avoid foreclosure and ensure you have safe and reliable housing for you and your family.
In addition to contacting the VA, veterans facing foreclosure should also contact an experienced foreclosure attorney. A New York foreclosure attorney is familiar with New York foreclosure laws and can guide a veteran through this confusing process. An attorney will educate a veteran about their options, various programs, and grants available and help them make the best decision for their future.Don’t hesitate to contact a New York foreclosure lawyer today for a free consultation.