The Emergency Homeowners Loan Program (EHLP), administered by the Department of Housing and Urban Development (HUD) to help homeowners avoid foreclosure by providing a forgivable loan of up to $50,000, ended on September 30, 2011.
The $1 billion federal program authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in July 2010, but applications were only accepted beginning in June 2011. Since then merely $500 million has been used, leaving $500 million in unused funds to be returned to the Treasury Department.
The failure of the Emergency Homeowners Loan Program is attributable to poor implementation and cumbersome eligibility requirements that disqualified many applications. To qualify, applicants had to be at least 90 days behind on mortgage payments; current gross income had to be 15 percent less than their previous income due to unemployment, underemployment or medical condition; the property had to be owner-occupied, single family residence and principal place of residence; and applicants had to show their ability to resume payments once the EHLP loan ended.