Three years ago, Kinyemi Sims found some free money to help her catch up on her property taxes. She was nearly $12,000 behind and was afraid she wouldn’t be able to prevent a foreclosure on her property.
She found the help she needed through Step Forward Michigan, a federally-funded interest and payment-free, forgivable loan program that helps the state’s homeowners catch up on mortgage payments and delinquent taxes up to $30,000.
To qualify, she had to share her income and personal information, but it was a small price to pay to keep her home.
“A lot of people don’t want to apply because they don’t want to give up their income or personal information,” she says. “Yes, give your information to people who want to help you. They don’t understand it could pay off their entire balance. You can lose your house to taxes and you built your family in that house. It’s too simple to follow the process and apply to not do it and lose your house.”
In Detroit alone the program has paid out more than $64 million in property tax and mortgage help for 7,085 Detroit homes.
Sims, 42, of Detroit, completed the online application, and in about 30 days she was informed her back taxes and current taxes would be covered.
“I was in the process of going through bankruptcy and I was on disability,” she says. “It was a difficult time for me. I was really struggling because I had taken in some children and having trouble covering all my expenses.”
After she found assistance from Step Forward Michigan, she qualified for a tax exemption and was able to renovate her home. Since then she’s recommended the program to several friends who also found themselves in difficult circumstances and received financial assistance.
Michigan homeowners may quality for the program if:
- You own and lived in your home when the property taxes were due (your name is on the recorded property deed)
- You have less than $10,000 in the bank (not including retirement accounts)
- You have enough income to pay next year’s property taxes
“We want to make sure that as Michigan continues recovering, nobody gets left behind,” says Chad Coffman, project lead for Step Forward Michigan. “There are still funds available with the program and our intent is to spend all those funds helping homeowners in Michigan.”
Michigan was among the hardest hit states during the nation’s housing crisis that started in 2007. Thousands were losing their homes because they had lost jobs or were underemployed and were unable to cover their mortgage and property tax payments. The problem is far from over. In 2016, the state ranked second in mortgage foreclosures, according to the National Foreclosure Report from CoreLogic, a California-based real estate analytics corporation.
The U.S. Treasury Department funded the state program in 2010 to help stem the housing crisis, and Michigan was among 18 states that received the special funding. Since then Step Forward has covered delinquent property tax and mortgage payments for more than 33,400 households.
In Wayne County, 10,503 homeowners received $58 million for past due property taxes and more than $40 million for mortgage assistance. In Detroit alone the program has paid out more than $64 million in property tax and mortgage help for 7,085 Detroit homes.
Last year, the program received an additional $59.9 million in federal funds to help the state’s troubled homeowners.
Step Forward Michigan operates in Lansing through the Michigan Homeowner Assistance Nonprofit Housing Corporation (MHA), in collaboration with the Michigan State Housing Development Authority (MSHDA). About 70 staff members work to process applications and administer funding to county treasurer’s offices across the state.
In Genesee County, Step Forward Michigan has provided 1,502 households with more than $2 million to pay property taxes and more than $9 million in mortgage payment assistance. In economically struggling Flint, 813 homeowners have received $5.2 million in property tax and mortgage payments.
The program is available to help Michigan homeowners who have experienced a hardship — such as job loss, income reduction, or medical bills — catch up on delinquent property taxes and missed mortgage payments.
“In the online application homeowners have to complete, we’re looking for details about what happened that caused them to fall behind, and we’re looking for income documentation,” Coffman says. “We only want to make sure the homeowner is able to afford their property taxes and mortgage payments going forward after we catch them up.”
The loan note includes zero percent interest, requires no monthly payments, and is forgivable over a five-year period at a forgiveness rate of 20 percent per year as long as you are occupying the property as your principal residence. After five years, the loan no longer is due.
Since she received help, Sims has become a messenger for the program.
“It’s free money, and some people don’t understand what it means when you tell them there’s a program out there to help,” she says.
Homeowners can get more information or apply for the program by calling 866-946-7432. Apply online at StepForwardMichigan.org.
What’s needed to apply for Step Forward Michigan
Sufficient documentation must be submitted to show the monthly housing expense is sustainable. Below is a list of various forms of income and examples of standard documentation that may be used;
- Wages: Recent pay stub reflecting employer name, gross earnings, and year-to- date earnings
- Self Employed Income: Recent federal income tax return and, as applicable, the business tax return, and profit/loss statement
- Benefit or Pension Income: Award statement showing amount and frequency, and recent bank statement showing deposits
- Rental Income: Recent federal income tax return and, as applicable, the business tax return, current lease agreement, and recent bank statement showing deposits
- Investment Income: Recent investment statements and recent bank statement showing deposits
- Alimony or Child Support: Copy of divorce decree or court order and recent bank statement showing deposits
- Supplemental Assistance: Supplemental assistance program award statement, such as food or cash assistance, showing amount and frequency and recent receipt. This amount may be considered if homeowner is also receiving other income.
In addition, all applicants who sign the application must indicate the balance of any liquid cash reserves that are held in a depository account, such as certificates of deposit, checking, saving, money market, debit, demand deposit, and NOW accounts on the loan application. A recent statement from these accounts that reflects the financial institution’s name, account number, owner(s) name, current balance, and a 30-day transaction history may be required.
Additional supporting documentation or details may also be required to explain any transfers, withdrawals or large transactions shown in statements provided.