Minnesota Mortgage Relief: Your Options for Avoiding Foreclosure

Facing financial hardship and the worry of making mortgage payments can be one of life's most stressful experiences. The fear of foreclosure often feels overwhelming, leaving you unsure where to turn. If you are struggling with your mortgage, it is crucial to know that you are not alone and that a robust network of support and legitimate mortgage relief options exists for Minnesota homeowners.

The purpose here is to provide a clear, current, and actionable roadmap to the mortgage help and foreclosure prevention resources available in Minnesota. Many homeowners searching for a "Minnesota mortgage relief program" find outdated information, particularly about past pandemic-era programs. This can heighten anxiety and lead to inaction, which is the greatest risk when facing foreclosure.

Instead of confusion, you need a straightforward plan. What follows is a detailed breakdown of the steps you can take, the expert guidance you can receive for free, and the specific programs that can help you achieve housing stability.

The Status of Home Help MN: What Homeowners Need to Know

To move forward, it is essential to first address the most common point of confusion for Minnesota homeowners seeking assistance: the Home Help MN program.

Program Closure

Stated unequivocally, the Home Help MN program is closed and is no longer accepting applications. This program was a temporary, federally funded initiative created as an emergency response to the COVID-19 pandemic. Its closure has created an information vacuum, leaving many homeowners at a frustrating dead end.

It is critical to understand that the end of this single program does not mean the end of available support. The statewide infrastructure for homeowner assistance remains strong. The key is shifting focus from this defunct program to the durable, ongoing resources available to help you right now.

Original Purpose of Home Help MN

The program's goal was to provide direct financial aid to homeowners who experienced a qualifying financial hardship due to the pandemic, such as lost income or increased expenses. The aid, which did not need to be repaid, provided up to $50,000 per household to help homeowners get current on past-due housing costs.

Assistance covered expenses such as:

• Mortgage payments
• Contract for deed payments
• Property taxes
• Homeowner's insurance
• Homeowner association (HOA) fees
• Manufactured home loans and lot rent

Your First Action: Contacting Your Mortgage Servicer

Before exploring any other option, the most critical step is to contact your mortgage servicer—the company you send your monthly payments to. Proactive communication is your most powerful tool. Delaying this conversation can severely limit your options as late fees accumulate and the foreclosure process moves forward.

If you are unsure who your servicer is, you can use the online tool provided by the Consumer Financial Protection Bureau (CFPB) to identify them.

Key Workout Options to Discuss

When you contact your servicer, you are opening a negotiation to find a sustainable solution. Lenders have a structured set of "workout options" designed for homeowners in your situation. Understanding these terms will help you have a more productive conversation.

• Forbearance: This is a temporary agreement where your servicer allows you to pause or make smaller payments for a limited time. It is not forgiveness; you will have to repay the skipped payments later. Forbearance is designed to help you manage a short-term financial crisis.
• Repayment Plan: If you have fallen behind but can now resume your regular payments, a repayment plan may be an option. This allows you to catch up on the past-due amount by adding a portion of it to your regular monthly payments over a set period.
• Loan Modification: For homeowners facing a long-term financial change, a loan modification is often the most sustainable solution. This permanently changes one or more of your mortgage terms to make your monthly payment more affordable. A modification could involve reducing your interest rate, extending the loan term, or adding the past-due amount to your loan balance.
• Other Options: If keeping the home is not feasible, your servicer may discuss alternatives like a short sale (selling the home for less than you owe) or a Deed-in-Lieu of Foreclosure (voluntarily giving the property to the lender). These options have significant credit implications and should be a last resort.

Free Expert Guidance: Minnesota's Non-Profit Housing Counselors

You do not have to navigate this process alone. The single most important resource for a Minnesota homeowner facing foreclosure is a HUD-approved housing counselor. These services are provided by non-profit organizations and are always free, confidential, and non-judgmental.

State and federal agencies consistently direct distressed homeowners to these counselors because they are trusted, expert intermediaries. A housing counselor is your advocate, working solely on your behalf to bridge the gap between you and your lender.

What a Housing Counselor Can Do for You

A certified foreclosure prevention counselor will:

• Conduct a thorough review of your financial situation to understand the root cause of the hardship.
• Clearly explain the Minnesota foreclosure process and all available options in simple, easy-to-understand language.
• Help you gather the necessary documents and prepare a complete and effective application for a loan modification or other relief.
• Communicate and negotiate directly with your mortgage servicer on your behalf to achieve the best possible outcome.

How to Connect with a Counselor

The primary hub for connecting with certified counselors is the Minnesota Homeownership Center (HOCMN). This statewide non-profit maintains a network of trusted, local counseling agencies that provide free foreclosure prevention services.

• Phone: 651-659-9336 or Toll-Free: 866-462-6466
• Website: hocmn.org

You can also find a U.S. Department of Housing and Urban Development (HUD) approved agency directly through the official search tools provided by HUD and the CFPB. Prominent providers in Minnesota include LSS Financial Counseling and Twin Cities Habitat for Humanity.

Key Foreclosure Prevention Resources and Programs in Minnesota

Beyond direct mortgage modification, Minnesota offers a multi-layered safety net of programs designed to promote housing stability. Addressing other financial pressures, such as utility bills or property taxes, can free up the resources needed to get your mortgage back on track.

State and County-Level Support

• Minnesota Attorney General's Office: This office provides crucial information on homeowner rights and is the main entity for reporting mortgage relief scams. Their "Facing Mortgage Foreclosure" publication is an essential resource.
• Minnesota Housing: As the state's housing finance agency, Minnesota Housing's ongoing role is to refer distressed homeowners to expert resources like the Minnesota Homeownership Center.
• County and Tribal Human Services Offices (Emergency Assistance): Low-income families facing a crisis may qualify for a one-time cash grant through the Emergency Assistance (EA) program. You can begin the application process online at MNbenefits.mn.gov or by contacting your local office.
• Community Action Agencies: These local non-profits provide a wide range of services, including housing counseling, energy assistance, and food support, to help stabilize your entire financial situation. 

Property Tax and Utility Assistance

• Property Tax Relief: Minnesota offers property tax deferral programs, especially for seniors, which allow eligible homeowners to postpone paying their property taxes. Contact your county property tax department for information.
• Energy and Utility Assistance: Minnesota's Energy Assistance Program (EAP) helps eligible households pay their heating and electricity bills. Additionally, the state's Cold Weather Rule protects customers from disconnection between October 1 and April 30 if they have a payment plan.

Quick Reference: Key Contacts for Mortgage Assistance

How to Identify and Avoid Mortgage Relief Scams

During times of financial distress, homeowners become prime targets for predatory scams. These fraudulent operations prey on fear and desperation, promising quick fixes while often making the situation much worse.

The Most Important Rule

The single most important rule to remember is: Legitimate foreclosure prevention assistance from non-profit, HUD-approved agencies is always free. You should never have to pay an up-front fee for help modifying your mortgage or avoiding foreclosure.

Scammers don't just steal your money; they steal your most valuable asset—time. While you are paying a scammer for a promised solution that will never materialize, the legal clock on the foreclosure process is ticking. By the time you realize you have been defrauded, you may have missed critical deadlines.

Common Red Flags of a Scam

Be on high alert for these common warning signs:

• Guarantees or Promises: Scammers often guarantee they can stop a foreclosure. No legitimate organization can make such a promise.
• Demands for Up-Front Fees: This is the most blatant sign of a scam. Under Minnesota law, foreclosure consultants cannot collect fees until after they have provided the service.
• Official-Sounding Names: Scammers use names with words like "Federal," "National," or "HUD" to sound like a government agency. Always verify an organization's legitimacy.
• High-Pressure Sales Tactics: You may be pressured to sign paperwork immediately without time to read it. A legitimate counselor will give you time to understand everything.
• Instructions to Pay a Third Party: A scammer may tell you to stop paying your mortgage servicer and pay them instead. Never send your mortgage payment to anyone other than your servicer.

If you encounter a mortgage relief scam, report it immediately to the Minnesota Attorney General's Office at 800-657-3787 and the Consumer Financial Protection Bureau (CFPB).

Your Step-by-Step Action Plan for Mortgage Stability

Feeling overwhelmed is normal, but it can lead to inaction. The key to successfully navigating this challenge is to break it down into a clear, manageable set of steps.

1. Don't Panic. Act Now. Acknowledge the situation, but do not let fear paralyze you. The sooner you take action, the more options will be available. Doing nothing is not an option.

2. Gather Your Key Financial Documents. To have a productive conversation, you will need your financial information organized. Gather the following:

• Your most recent mortgage statement.
• Proof of income for your household (pay stubs, W-2s, tax returns).
• A list of your average monthly household expenses.

3. Call Your Mortgage Servicer. With your documents in hand, call the number on your mortgage statement. Explain your situation and ask about your eligibility for workout options like a forbearance, repayment plan, or loan modification.

4. Contact a Free Foreclosure Prevention Counselor. This is your most important step. Call the Minnesota Homeownership Center at 866-462-6466 to be connected with a free, certified counselor in your area. They will guide you through every subsequent step.

5. Explore Additional Community Support. Based on your counselor's advice, investigate other layers of the financial safety net. Contact your local county or Tribal Nation office to inquire about Emergency Assistance or other local housing programs.

Facing mortgage trouble is a daunting challenge, but it is one you do not have to face alone. Minnesota has a strong network of free, expert resources ready to help. By taking these decisive, informed steps, you are moving from a position of uncertainty to one of empowerment, giving yourself the best possible chance to achieve long-term housing stability.

 Frequently Asked Questions