Homeowners' Equity Recovery Opportunity Loan Program (HERO)
HERO is a loan program designed to improve the financial situation of Pennsylvanians who are not able to afford their current mortgage payments. The HERO program provides for up to 100 percent financing but, instead of refinancing your current mortgage into a new loan, PHFA purchases your loan directly from your current lender and then sets you up on an affordable repayment agreement. This program is for borrowers not eligible for PHFA's REAL program (REfinance to an Affordable Loan) or another mortgage refinance product available in the general market due to credit issues or owing more than your home's current appraised value.
Funding for the HERO program is limited. Loans are reviewed by PHFA on a case-by-case basis as funding levels permit.
How can HERO help you?
- HERO provides a fixed-rate mortgage for up to 30 years in an amount up to 100 percent of your home's current value.
- HERO provides an affordable interest rate (see the rate sheet for details).
- PHFA services the loan so you don't have to worry about it being sold to another lender or servicer.
- Property taxes and insurance (mortgage, homeowner's, and flood if applicable) are included in your monthly payment amount so you don't have to worry about budgeting for them on your own.
- If you owe more than your home's current value, PHFA may be able to negotiate with your current lender to reduce the amount owed on your loan.
- The HERO loan may be used to pay off: the current mortgage debt, closing costs, prepayment penalties (efforts should be made to have the current lender/servicer waive any prepayment penalties), and delinquent property taxes.
- All approved borrowers must attend in-person financial counseling at a PHFA-approved agency. This will increase your financial knowledge and help you learn how to more effectively manage your debt, budget your income, and save your money.
Read on to see if you might be eligible for a HERO loan.
- The combined gross annual income of all borrowers may not exceed $120,000. This limit may be waived based upon individual circumstances for individuals not served by a loan product available in the general marketplace.
- You have made an effort to meet your financial obligations to the best of your ability.
- You have sufficient and stable income to support timely repayment of the HERO loan in regular, monthly installments. (All borrowers must agree to make monthly mortgage payments by automatic payment directly from your bank account.)
- You own the mortgaged property and reside in it as your permanent residence.
- If you have stopped making your mortgage payments, you can account for your cash flow by showing how you have escrowed, saved, or redirected those funds.
- The HERO loan must be in first lien position.
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