Principal Reduction Program (PR)
Population to be served:
Severely underwater, low-to-moderate income homeowners who have been consistently "current" on their mortgage payments. Hardest Hit Funds PR funds will be used to reduce the amount of their outstanding principal loan balance to an amount as close to 100% LTV as possible. The program will assist borrowers that are current, that had no 60-day late payments within two years of the application date and that has a current loan-to-value that exceeds 125%.
Use of funds:
Loan funds are to be used to help reduce the loan-to-value to an amount not less than 100%.
Assistance Will Be Provided in the Form of a Loan. A maximum of $50,000 is available to eligible homeowners. If the homeowner has been previously funded by HHF UMAP/MLRP or MLRP-only, the maximum assistance for all HHF funds (PR, UMAP and MLRP combined) cannot exceed $50,000.
The funds are used to reduce the outstanding principal loan balance to an amount as close to 100% LTV as possible and will be disbursed by Florida Housing directly to the loan servicer on behalf of the homeowner. The funds will be in the form of a 0% interest, non-recourse, and deferred-payment forgivable loan which will subordinate to current mortgages.
The loan will be forgiven over a 5 year period with each 20% forgiveness occurring months 12, 24, 36, 48 and 60 from the date the closing documents were executed. The terms may be different if the current first mortgage is a FHA, VA or RD loan. The loan must be paid back if the home is sold or refinanced prior to the maturity date. Florida Housing will agree to subordinate the PR Loan for homeowners who refinance their first mortgage to receive more favorable loan terms. If a homeowner refinances their loan to consolidate debt or receives cash out, the homeowner would be required to repay the PR Loan according to the loan terms.