Recently, the federal government and states have both teamed up to help homeowners stop foreclosures – especially local governments, who depend on the income from property tax. The federal government has come out with several programs and initiatives designed to help people keep their homes, leading a consortium of states who are doing similar things. Now, Idaho has joined that list with its latest offering: $13 million to start a program to help Idaho homeowners stop foreclosure.
The new program offers Idaho homeowners the opportunity to gain access to $50,000 in forgivable loans to pay their mortgage payments for up to two years. These loans are at zero interest. The program is expected to help as many as 600 Idaho homeowners stop foreclosure, operating on the theory that giving a homeowner more time means they are more likely to keep their house as the economy (hopefully) improves over two years.
The government agency running the program, the Idaho Housing and Finance Association, said they had received up to 340 applications for the program. While it may seem like a small number, for the Idaho market it could represent a substantial improvement for the housing market there as a whole if more homeowners pursue foreclosure modification successfully instead of go through foreclosure.
Foreclosure modification programs are viewed as some of the main tools in fighting foreclosure and getting home prices back to where they were – at least headed in that direction. Foreclosures are like an anchor to home prices, weighing them down below what they would otherwise be. So, any program like Idaho’s program and the federal HAMP will hopefully spur an increase to home prices.
Of course, there are still plenty of buying opportunities. But even with fewer foreclosures, this is good for buyers because fewer foreclosures could mean higher prices – meaning that now is an especially good time to buy.
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Written by Alex Rolim.
