Federal program aimed at helping homeowners with mortgage payments

Alisa Boswell: Freedom New Mexico Eastern Plains Housing Development Corporation Executive Director Monica Gutierrez and associates, from left, Chandra Hall, April Uribe and Anna Avila, go over dates for housing plans Friday. Gutierrez said the corporation is in full support of a new federal homeowners loan program, which helps pay mortgages for struggling homeowners.

Alisa Boswell

Eastern New Mexico residents may soon benefit from a new federal loan program called The Emergency Homeowner Loan Program.

The program is geared toward low-income homeowners who are struggling with mortgage payments. It grants loans ranging from $35,000 to $50,000 per homeowner.

Kim McGrigg, spokesperson for Money Management International, one of the multiple non-profit organizations chosen by the federal government to take part in the program, said the program is available in 32 states and will help approximately 30,000 homeowners.

She said New Mexico is eligible for $10.7 million of the $1 billion given to the program through the Dodd-Frank Wall Street Reform and Consumer Protection Act, which took effect in July 2010 to help with affordable housing issues.

“We all know how many people are struggling with unemployment or low employment right now,” McGrigg said. “It doesn’t benefit anyone to lose their homes. I know the program doesn’t match the scope of the overall problem but I often imagine a stadium of 30,000 people and if you think about it helping all of them, it’s a big impact.”

McGrigg said the first step is for a homeowner in Curry or Roosevelt counties to apply for the pre-applicant screening, which has a July 22 deadline. She said any New Mexico homeowner can apply and those who qualify will be placed into a lottery drawing. If chosen by the lottery drawing, homeowners will be contacted by one of the corporations administering the program.

“It’s really a simple process,” McGrigg said. “A lot of it will be standard things you have to deal with when applying for a loan.”

McGrigg said the loan is interest free and forgivable if certain conditions are met by applicants. She said after the mortgage is paid off, the loan balance will be reduced by 20 percent every year until it reaches a zero balance.

“I think what it will mean for New Mexico residents is preventing foreclosures,” said Monica Gutierrez of Eastern Plains Housing Development Corporation in Clovis, a non-profit company also geared towards low income homeowners. “If they can keep people in their homes, it will lessen the amount of foreclosure. Even though they’re in homes and buying them, some people have a hard time maintaining them.”

Gutierrez said her organization help low-income homeowners in 10 eastern New Mexico counties to replace or remodel their homes. She said she sees the new federal program as working towards the same goal.

According to Realtytrac.com, in June there were eight foreclosures in Curry County with one out of every 2,614 homes foreclosed. In Roosevelt County, there were three foreclosures with one out of every 2,679 homes being foreclosed.

Michelle Bailey, a Realtor for HOMESPOT Properties in Portales, said the program could help some local homeowners, particularly those in a flood zone.

Portales is classified as an area of higher risk for flooding, which makes buying and selling homes more difficult for local residents, Bailey said. Some residents who cannot afford their homes have a difficult time selling them because of a 3 1/2 percent down payment that is required when purchasing a home within a flood zone, she said.

“If people are not able to sell their homes because they are within the flood zone, they may lose their home. That program would help people be able to stay in their homes,” Bailey said. “The less foreclosures we have, the better the market will be and it will help our local economy for sure.”

McGrigg said Clovis and Portales residents can apply for the program by phone or Internet through the multiple New Mexico corporations which are involved out of Santa Fe, Albuquerque and Las Cruces.