State officials on Wednesday announced a $110 million program aimed at helping thousands of homeowners struggling to stay in their homes.
The program – funded with federal dollars – provides up to $50,000 to people who are “underwater,” that is, who owe more on their mortgages than their homes are currently worth, officials told The Atlanta Journal-Constitution.
Being underwater typically prevents homeowners from taking money out of the home through refinancing. Moreover, it is a large obstacle to selling the home, since the seller would have to bring cash to the closing to pay off the loan.
The average price of Atlanta homes bottomed out in mid-2012 and has risen dramatically since. But in many areas, the recovery has lagged.
So long as the neighboring market is improving, there is hope of catching up. But when home values are not rebounding, a homeowner can be virtually trapped in a house, responsible for taxes and repairs while making a monthly payment like a renter with little hope of a return on his or her investment.
Some non-profit groups are also working on the problem. For example, the Atlanta Neighborhood Development Partnership has been given a $1 million grant to acquire and fix up homes for low-income buyers.