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For Tennessee homeowners facing financial hardship, the search for a tennessee mortgage relief program can lead to a mix of outdated information and complex options. The most prominent recent program, the Tennessee Homeowner Assistance Fund (TNHAF), is no longer available, but this does not mean that help is out of reach.
A robust network of state, federal, and local resources exists to provide payment assistance, prevent foreclosure, and reduce overall housing costs for those in need. Understanding these current programs is the first step toward securing financial stability and protecting your home.
It is essential for homeowners to have clear and current information regarding available assistance. The primary source of confusion often stems from programs that were widely available in the recent past but have since concluded.
TNHAF Program is Closed
The Tennessee Homeowner's Assistance Fund (TNHAF), administered by the Tennessee Housing Development Agency (THDA), is officially closed. The program is no longer accepting applications because the funds from the U.S. Department of Treasury have been fully used. The online portal confirms that it is not open to new applicants. This is part of a nationwide trend, as most state Homeowner Assistance Fund (HAF) programs have exhausted their funding.
Purpose of the Federally-Funded Program
The TNHAF was a temporary, emergency measure, not a permanent state program. It was created through the American Rescue Plan Act, which allocated nearly $10 billion to the national Homeowner Assistance Fund (HAF) to help households impacted by the COVID-19 pandemic. The U.S. Department of the Treasury oversaw the national program, with states like Tennessee managing their own funds.
Tennessee received over $168 million for its program, which began in January 2022. The goal was to assist homeowners who suffered a financial hardship after January 21, 2020, due to the pandemic. Qualifying hardships included job loss, reduced income, or increased expenses related to COVID-19.
Eligible households could receive up to $40,000 for various housing costs, including:
Moving Forward: Where to Find Help Now
The closure of the TNHAF program does not mean mortgage assistance has ended in Tennessee. Instead, it signals a return to a more diverse landscape of established, ongoing support systems. Numerous other state, federal, and local programs remain available to help homeowners manage payments and avoid foreclosure.
When you're at risk of missing a mortgage payment, acting quickly is crucial. Proactive communication and seeking expert guidance are the most effective steps to prevent a difficult situation from becoming a crisis.
Contact Your Mortgage Servicer First
Before looking for external programs, your first and most important call should be to your mortgage servicer—the company that collects your monthly payments. Servicers have access to immediate relief options, known as loss mitigation, which can include temporary payment forbearance, repayment plans, or permanent loan modifications.
The Tennessee Housing Development Agency (THDA) warns that delaying seeking help is a significant mistake. Each missed payment adds more fees and reduces the number of available assistance options. Contacting your servicer as soon as you anticipate a problem provides the widest range of potential solutions.
The Role of a HUD-Approved Housing Counselor
Navigating mortgage relief options alone can be overwhelming, especially during a stressful time. The U.S. Department of Housing and Urban Development (HUD) sponsors a network of non-profit housing counseling agencies to provide free, expert guidance.
A HUD-approved housing counselor is a dedicated advocate who can:
This free service is invaluable. A counselor can guide you through the complex system of relief options, which vary based on loan type (FHA, VA, USDA, Conventional) and servicer policies, ensuring you make informed decisions.
How to Find a Certified Housing Counselor in Tennessee
Connecting with a qualified, free housing counselor is simple. Tennessee homeowners can use several reliable methods:
The Tennessee Housing Development Agency (THDA) is the state's main housing authority and a central hub for homeowner assistance. While direct mortgage payment programs like TNHAF have ended, THDA now focuses on providing expert guidance, structured mitigation, and preventative financial support.
THDA's Foreclosure Prevention Resources
THDA's primary service for homeowners in distress is its free foreclosure prevention counseling. As a HUD-approved agency, THDA's counselors offer confidential consultations to help you understand your options and create a plan to avoid foreclosure.
A key part of this service is educating homeowners about foreclosure rescue scams. THDA warns homeowners to be cautious of any person or organization that:
Payment Assistance for THDA-Serviced Loans (VMLS)
If your mortgage is serviced by THDA's partner, Volunteer Mortgage Loan Servicing (VMLS), you can access direct payment assistance by calling a VMLS specialist at 844-865-7378. The process for VMLS-serviced loans often involves a formal "Loss Mitigation" review, which may require submitting a complete Loss Mitigation Package.
Understanding Loss Mitigation Options
Loss mitigation is a process where a servicer evaluates a series of options to find a solution that helps you keep your home. The available options depend on who insures your loan (e.g., FHA, VA, USDA).
Common tools include:
| Loan Type | Loss Mitigation Package Required? | Common Home Retention Options Available |
|---|---|---|
| FHA | No | Repayment Plan, Forbearance, Partial Claim, Modification. A Trial Payment Plan (TPP) is often required for permanent options. |
| USDA | Yes | Informal Repayment Plan, Special Forbearance, Mortgage Recovery Advance (MRA), Loan Modification. A TPP is typically required. |
| VA | No | Special Forbearance, Repayment Plan, Loan Modification. A TPP is often required. |
| Conventional (Freddie Mac) | Yes | Forbearance, Repayment Plan, Payment Deferral, Flex Loan Modification. A TPP is typically required for modifications. |
| Conventional (Other) | Yes | Forbearance, Repayment Plan, Loan Modification. A TPP is typically required for modifications. |
Financial Aid for Essential Home Repairs and Modifications
A major financial shock, like a failed HVAC unit or roof, can disrupt a household budget and lead to mortgage delinquency. THDA funds programs that provide grants for essential repairs, helping to prevent a housing crisis before it starts.
The Emergency Repair Program (ERP)
The ERP is designed to fix or replace essential systems or critical structural problems that pose an immediate danger to the health and safety of low-income homeowners who are elderly (age 60+) or have a disability. Homeowners apply through local ERP agencies, not directly to THDA.
The Home Modifications and Ramps Program
This program funds the construction of wheelchair ramps and other home modifications to improve accessibility for Tennesseans with disabilities. By covering these costs, the program helps individuals remain safely in their homes. It is administered statewide by United Cerebral Palsy of Middle Tennessee with funding from THDA.
Reducing Household Costs: Energy Assistance Programs
Lowering a household's monthly utility bills can free up funds for the mortgage payment. THDA administers federal funding for two key programs aimed at reducing energy costs for low-income households.
Weatherization Assistance Program (WAP)
WAP helps increase the energy efficiency of homes to lower monthly utility bills. Services can include adding insulation, weather stripping, and caulking. The program prioritizes households with young children, elderly members, or individuals with disabilities.
Low Income Home Energy Assistance Program (LIHEAP)
LIHEAP provides direct financial assistance to help low-income households with their energy costs, typically as a one-time payment. The program is administered in all 95 Tennessee counties through a network of 19 local agencies.
In addition to state initiatives, several federal programs are directly available to Tennessee residents, offering another layer of support for specific situations.
USDA Section 504 Home Repair Program for Rural Residents
For homeowners in eligible rural areas, the U.S. Department of Agriculture (USDA) offers the Section 504 Home Repair program, also known as the Single Family Housing Repair Loans & Grants program.
Eligibility
To qualify for the Section 504 program, you must:
Funding Details
The program provides two forms of assistance:
Loans and grants can be combined for up to $50,000 in total assistance.
How to Apply
Applications are accepted year-round through local USDA Rural Development offices. Tennessee residents can find their local office or contact the state office at (615) 783-1376 for more information.
Assistance Following a Natural Disaster
After a natural disaster, a specific sequence of federal aid becomes available. Initial assistance is often provided by the Federal Emergency Management Agency (FEMA) for temporary housing and essential repairs. The U.S. Small Business Administration (SBA) also offers low-interest disaster loans.
Following these initial responses, HUD provides additional support for long-term recovery. The agency has a dedicated disaster assistance hotline at 1-800-304-9320 and works with FHA lenders on special forbearance options for affected homeowners.
General Resources from HUD
The U.S. Department of Housing and Urban Development (HUD) offers a wealth of resources. For those with FHA-insured loans, the FHA National Servicing Center is a key contact. HUD also offers various home improvement loan programs, such as Title I Property Improvement Loans, which can finance necessary repairs.
Property taxes are a significant expense that can create financial strain, especially for those on a fixed income. The State of Tennessee offers a Property Tax Relief Program to ease this burden for vulnerable residents.
Understanding the Program
This state-funded program provides a reimbursement to eligible homeowners for a portion of the property taxes they have already paid. It is not a tax exemption; you are still responsible for paying your tax bills in full by the deadline.
Eligibility Criteria
The program targets specific groups of homeowners who use the property as their primary residence. Eligible categories include:
An individual can only receive tax relief on their primary residence in any given tax year.
How to Apply
Applications are managed at the local level and can be obtained from your county trustee's office or city collecting official's office. For questions, the State of Tennessee Tax Relief Department can be contacted at 615-747-8871.
While state and federal programs offer a broad safety net, some of the most immediate help can be found at the local level.
Examples of Municipal Programs
A prime example is the Metro Action Commission in Nashville and Davidson County. This agency provides one-time financial aid for income-eligible residents facing emergencies, which can be used for mortgage payments, rent, delinquent property taxes, and utility bills.
The Metro Action Commission offers tailored assistance for:
How to Research Assistance in Your County
For homeowners outside of Davidson County, finding local resources requires a proactive search.
The primary goal of the Tennessee Mortgage Relief Program is to prevent mortgage delinquencies, defaults, and foreclosures for eligible homeowners experiencing financial hardship due to the COVID-19 pandemic. The program provides financial assistance to help homeowners catch up on missed payments and stabilize their housing situation.
As the program utilizes a finite amount of federal funding, its status can change. Homeowners should always check the official Tennessee Housing Development Agency (THDA) website for the most current information regarding application availability and program deadlines before attempting to apply.
The Tennessee Mortgage Relief Program can cover various housing-related expenses. This typically includes overdue mortgage payments, delinquent property taxes, homeowner's insurance, and sometimes homeowner association (HOA) fees. The assistance is paid directly to the loan servicer or relevant third party.
A qualifying hardship is a material reduction in income or an increase in living expenses after January 21, 2020, directly or indirectly caused by the pandemic. This could include job loss, reduced work hours, or increased healthcare costs that have impacted your ability to pay your mortgage.
To be eligible for the Tennessee Mortgage Relief Program, you must own and occupy the property as your primary residence in Tennessee. You also need to meet specific income limits set by the program and attest to a financial hardship connected to the COVID-19 pandemic.
Yes, homeowners with mortgages currently in a forbearance plan may still be eligible to apply. The Tennessee Mortgage Relief Program is designed to help homeowners resolve delinquencies after their forbearance period ends, providing a pathway to getting current on their loan payments.
No, the assistance provided through the Tennessee Mortgage Relief Program is a grant, not a loan. If your application is approved, you will not be required to repay the funds you receive, provided you adhere to all program guidelines and attestations.
When applying, you'll typically need to provide proof of identity, income verification documents (like pay stubs or tax returns), your most recent mortgage statement, and a signed hardship attestation form. Having these documents ready can help streamline your application process.
No, applying for assistance through the Tennessee Mortgage Relief Program will not directly harm your credit score. In fact, receiving aid can help improve your credit over time by preventing foreclosure and allowing you to bring your mortgage account current.
For assistance, contact a HUD-approved housing counseling agency in Tennessee. These nonprofit agencies offer free guidance and can help you understand the eligibility requirements and navigate the application process, ensuring you submit all necessary information correctly.
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