THDA Stepping Up Lending Effort for Homeowners Near Foreclosure

Nearly a thousand Tennessee homeowners have applied with the state so far this year for temporary help making mortgage payments. The Tennessee Housing Development Agency is lending federal money to families who’ve lost work in recent years, and are trying to stay in their houses.

The program, called Keep My Tennessee Home, lends homeowners up to $15 thousand over the course of a year to make mortgage payments. And it can loan more money in counties hit hard by unemployment, mostly in rural areas, as well as Memphis.

Eventually the whole loan can be forgiven, if the family manages to stay in the home for five years. The idea is that keeping homes occupied benefits more than just the homeowner, says Bill ClenDening, the state agency’s foreclosure prevention manager.

“Saving one home does stabilize a neighborhood, and the tax base that neighborhood is in, and the whole economy… It’s not just a single person that is being helped at this point.”

So far the housing agency has approved around four hundred loans. Over the next five years or so the program aims to help some 11 thousand Tennessee households.

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Funding for the no-interest loans came about as part of the federal Troubled Asset Relief Program, or TARP. A lot of that money went to stabilize banks, but this slice was meant to deal with the foreclosure crisis. Tennessee got money to that end late last year, in the program’s third round.

Some have been critical of using government money to assist people with their mortgages. But ClenDening stresses the program is helping households that did nothing wrong – they lost income due to a layoff, for example.

“You can’t guess what someone’s outcome is going to be, and to do that I think would be wrong. We’ve had a lot of discussions about sustainability.”

So far the housing agency has mostly been getting word about the program out through foreclosure counselors, but now it’s turning to ads on TV and radio.