Homeowners in every state are chewing their nails and watching the housing markets, and Alabama is no exception. Let’s take a look at the Alabama Foreclosure Assistance options available to you if your home becomes unaffordable.

The federal Department of Housing and Urban Development (HUD) is the agency tasked with protecting and serving homeowners. They have a number of programs available in every state.

  • Making Home Affordable, or MHA, is the umbrella strategy under which many relief programs are clustered.
    • HAMP (Home Affordable Modification Program) makes your home more affordable by linking your mortgage payment to your monthly income (gross/pre-tax income). Under this modification, your payment will decrease by an average of 40%, and cannot exceed 31% of your monthly income.
    • PRA (Principle Reduction Alternative) encourages investors and services to change the amount that you owe on your home. This option is for homeowners with properties that are worth a lot less than the amount that they owe on the property.
    • 2MP (Second Loan Modification Program) This program is for homeowners with multiple mortgages, where the first mortgage has already been modified under the Home Affordable Modification Program. If a second-lien, home equity loan or other secondary lending relationship is what’s creating the difficulty in making your mortgage payments, this is the program to investigate further.
    • HARP (Home Affordable Refinance Program) This option is only for borrowers who are current on their mortgage — no missed payments or insufficient payments — but whose homes have significantly reduced in value since the time of purchase. Homeowners who seek assistance through the Home Affordable Refinance Program are those who have investigated traditional refinance options, and are unable to access them due to their home’s decrease in value.
    • UP (Home Affordable Unemployment Program) This temporary reduction or elimination of payments is only available to homeowners who are having difficulty making their payments due to unemployment. It lasts for up to 12 months, or until you secure a new job.
    • HAFA (Home Affordable Foreclosure Alternatives) If you are looking to move into housing that is more affordable for your budget, this program can help you transfer ownership of your home through a short sale or deed-in-lieu-of-foreclosure.
  • Free foreclosure prevention counseling through a company called 995Hope, reachable at 1-888-995-HOPE

Alabama Foreclosure Assistance

But not all programs are federal — there are also some relief options specific to Alabama. These include:

  • Hardest Hit Alabama — Cash grants for homeowners facing temporary financial hardship
  • Foreclosure Prevention Project — a consortium of Alabama-based nonprofit organizations and community partners providing free counseling and advice specific to your situation. They can also help you apply for the Hardest Hit Alabama program.

Facing foreclosure is an incredibly stressful event. If you’re worried you may not be able to afford your home anymore, these programs can