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Underwater Homeowners Flood State's New Mortgage Assistance Program

September 25th, 2013 | WMFE - Florida's new mortgage-principal reduction program began accepting applicants Wednesday morning, and state officials expect to reach their cap of 25,000 registrants within the next few days. The program is set up to help residents who are "underwater" in their mortgages reduce the amount they owe by up to $50,000. However, not all applicants will get the assistance they're seeking.

A total of $350 million in federal government funds are available to homeowners whose properties are worth less than they owe. But there are limitations.

The program, administered by the Florida Housing Finance Corp., will provide an average of $35,000 in mortgage principal reductions to 10,000 eligible Floridians – just 10% of the state's underwater homeowners. The housing agency received 10,000 applications for assistance in the first day alone.

And in order to receive aid under the program, an applicant can’t be too far underwater. The Florida Housing Finance Corp. says it will only consider mortgages that exceed the worth of the house by 25% or less. Homeowners must also be current on mortgage payments, among other qualifications. 

Florida’s principal reduction program was reformulated after facing criticism earlier this year for being too restrictive.

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