Mary PoolStarting in 2007, America experienced a major housing crisis due to people losing their jobs and home prices declining.  Alabama was one of 18 states who were the hardest hit by the housing crises.  To assist homeowners in these 18 states, the U.S. Department of Treasury allocated $7.6 billion to their Hardest Hit Fund.  Alabama has received about $162 million from this fund and developed a program titled Hardest Hit Alabama to assist some unemployed homeowners and homeowners whose properties have drastically decreased in value.

About Hardest Hit Alabama

The Hardest Hit Alabama program has three areas of assistance:

  1. Mortgage Payment Assistance:  this part of the program may pay out up to $25,000 of benefits for homeowners who are currently receiving or may qualify for unemployment benefits in Alabama.  If you qualify, the benefits:
    1. May pay your ongoing mortgage payments to your mortgage servicer for a specific period of time and up to a specified amount, and/or
    2. May be used to bring your mortgage payments current, up to $12,500.  Again, the benefits would be paid directly to your mortgage services.
  2. Loan Modification Assistance:  this part of the program may benefit Alabama homeowners who are approved for loan modifications by their mortgage servicers.  These benefits may be used to bring your principal balance down and pay payment or escrow shortages so that you may meet the terms outlined in your approved mortgage modification.
    1. NOTE:  This program is NOT designed to force your mortgage services in a loan modification or assist you with getting them approved.  You must be approved for the loan modification first, by your mortgage servicer, before you may qualify for these benefits.
  3. Short Sale Assistance:  this part of the program may help homeowners pay for closing costs and remaining principal balances owed (up to 10% of the sales price) when they are selling their home as a short sale.  To apply for these benefits, your mortgage provider must first have agreed to a short sale.  This program cannot force your mortgage company into a short sale.

How Do I Apply for These Benefits?

To apply for these benefits, you must complete an application and meet the general eligibility requirements found online at, including but not limited to:

  • your household income (including all occupants 18 years & older) must be $77,560 or less.
  • your mortgage balance must be $258,690 or less.
  • the property must your primary residence and located in the state of Alabama

Does bankruptcy prevent me from applying for the Hardest Hit Alabama program?

No, you may still qualify for Hardest Hit Alabama benefits if you are in an active bankruptcy.  Under the Hardest Hit Alabama program, the State of Alabama does not issue loans but instead pays benefits to your mortgage servicer on your behalf.  You will never receive money directly from the State of Alabama under this program.  If you are in chapter 13, it is important for you to let your attorney know if your mortgage servicer will receive benefits on your behalf from the Hardest Hit Alabama program so that they may review your current household budget.

Will this program help me stop my upcoming foreclosure?

No. If you are facing foreclosure, please contact your local Bond & Botes office as soon as possible for your FREE consultation to discuss your options.  At Bond & Botes, we are attorneys providing financial solutions

Mary Pool
Written by Mary Pool

Mary Pool is a shareholder of the Bond & Botes Law Offices in Montgomery and Opelika, Alabama. She holds a Bachelor of Science from Auburn University at Montgomery, and a Juris Doctorate from Faulkner University’s Jones School of Law. She has represented thousands of clients over her more than 11 years working in the bankruptcy field. Read her full bio here.

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