Stimulus relief available for homeowners Published Aug. 4, 2009 By Anna Beier-Pedrazzi Air Force Flight Test Center Judge Advocate EDWARDS AIR FORCE BASE, Calif. -- Help for homeowners is here. On February 17, 2009 the President signed the stimulus package, the American Recovery and Reinvestment Act, enacted by Congress. ARRA includes significant provisions for military members who are facing financial pressures from home mortgages and the housing market decline. In particular, the ARRA dramatically expands the eligibility for the DoD Housing Assistance Program. A total of $555 million in appropriated funds were provided to finance this temporary expansion. The new law increases HAP authority to groups that were previously not covered. The intended beneficiaries are homeowners who cannot afford to wait until their home values can recover. The program is temporarily expanded to assist three major servicemember homeowner groups whose medical or professional situations require them to sell their primary residences and relocate beyond a normal commuting distance. In particular, the Act dramatically expands the eligibility for the HAP that was formerly available only to certain military members living near installations closing under the Defense Base Closure and Realignment Act of 1990 (commonly known as BRAC). The three groups affected by the transition to HAP are: (1) Warriors in Transition, (2) BRACmilitary servicemembers and Federal civilian employees and (3) servicemembers permanently reassigned to another location. The ARRA offers temporary homeowner assistance for members of the Armed Forces permanently reassigned during a specified time period during the mortgage crisis. HAP benefits offset some of the losses incurred when homes are sold, purchased by the government, or foreclosed on. While certain requirements must be met in order to qualify for relief under this provision, the key ones are: (1) the property involved is the current principal residence of the service member; (2) the service member purchased the property before July 1, 2006; (3) the service member was permanently reassigned on orders to a duty station or home port outside a 50-mile radius of the prior base or installation; and (4) the owner sold the qualifying property between July 1, 2006 and September 30, 2012 (or some earlier date in the regulations). Another new program just announced by the President is the Homeowner Affordability and Stability Plan. This program began on March 4, 2009. This plan's objective is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. The tradeoff for the lower interest rate is a longer duration, i.e., the mortgage is refinanced for a new 30- or 15-year term. The criteria for eligibility under the Homeowner Affordability and Stability Plan include having sufficient income to make the new payment and an acceptable mortgage-payment history. This relief is also only available for a first mortgage on a principal residence that meets Fannie Mae/Freddie Mac loan guarantee guidelines. Consequently, second mortgages or home equity loans do not qualify, nor do certain non-conforming loans. The Treasury Department's Homeowner Affordability and Stability Plan Fact Sheet specifically states that "refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe." Other programs may reduce the principal amount by agreement with the lender, but that is not a direct goal of this plan. For more information, visit: Homeowners Assistance Program Homeowner Affordability and Stability Plan Homeowner Affordability and Stability Plan Fact Sheet Homeowner Affordability and Stability Plan Executive Summary Support Under the Homeowner Affordability and Stability Plan: Three Cases