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Pennsylvania’s Homeowners’ Emergency Mortgage Assistance Program was created in the 1980s in response to job losses in the steel and coal industries. With funding tight, the approval rate for new loans in the Pennsylvania program has fallen to about 22% from a high of more than 40% in the 1980s. Roughly 80% of loans involve one-time payments, with just 20% going to borrowers who need continuing help with their mortgage payments for up to three years.
Karen and John Steele applied for a loan last year after Mr. Steele lost his job at a Pittsburgh bank. A 5.25% loan from the program will cover about $400 of their mortgage payments for up to 36 months, with the Steeles responsible for the remaining $284. “Knowing that there was help out there provided us with major relief, both emotionally and financially,” Ms. Steele says.
Under the Pennsylvania program, borrowers are put on a formal repayment plan once an annual review of their finances shows they have sufficient income.
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