Tennessee foreclosure residential properties have reached to over 24,000 according to RealtyTrac, a California-based firm that records foreclosure activities in the United States. The trend has been causing a lot of trouble to borrowers that the federal government has made a program in order to give help for homeowners living in the hardest hit areas such as Tennessee.
The Stimulus Second Mortgage Program is under the management of The Tennessee Housing Development Agency which aims to assist homeowners in purchasing a new house by providing a loan that funds at least 3.5 percent of the total housing cost. In order to qualify for the program, you have to meet the following requirements:
* You are a first time home buyer with a credit score of at least 620.
* You will be able to repay the Stimulus Loan until June of next year (without interest).
* Homebuyer must not exceed the maximum household income set by the THDA.
* The mortgage must be under the FHA.
* Borrower must undergo a Homebuyer Education provided by the state of Tennessee before he or she can apply for the said mortgage help.
* The loan servicer (both on the first and second mortgage) must be approved by the HUD. Furthermore, mortgage must be serviced by the U.S. Bank.
In order to repay the loan, you may use your federal tax refund and repay before June, 2011. If you are unable to pay after the due date, an interest rate of 1 percent will be added on your regular monthly payment which must be paid within the period of ten years. Make sure that debts are paid otherwise; your THDA Stimulus Loan will be in default.
Recently, the Congress passed the 2009 Tax Act also known as the American Recovery and Reinvestment Tax Act of 2009. The new bill gives exceptions to homeowners who have purchased their first homes between January to November, 2009. This means that the new homeowner can receive a tax credit without the required repayment. The only requirement is for the homeowner to occupy the property for at least three years. This is a great help for homeowners who cannot afford to repay their mortgages in a short period of time.