Texas Mortgage Relief: Your Options When Facing Payment Hardship

Facing difficulties with mortgage payments is a profoundly stressful experience for any Texas homeowner. The uncertainty and fear can be overwhelming, but it is crucial to understand that options are available. The single most important factor in successfully navigating this challenge is taking immediate, informed action.

While major state-run relief funds from the pandemic era have closed, a durable framework of support and established processes remains. The path forward involves proactive communication with mortgage servicers, expert guidance from certified housing counselors, and a clear understanding of the foreclosure prevention tools at a homeowner's disposal.

The Current State of Major Texas Mortgage Relief Programs

It is vital for homeowners to have the most current information to avoid wasting precious time pursuing resources that are no longer available. Several large-scale programs established in response to the COVID-19 pandemic have now concluded their operations.

Texas Homeowner Assistance Fund (TXHAF): Program Closed

The Texas Homeowner Assistance Fund (TXHAF), administered by the Texas Department of Housing and Community Affairs (TDHCA), is closed. As of April 15, 2025, the program is no longer accepting new applications or providing assistance to homeowners.

This program was established with federal funding from the American Rescue Plan Act of 2021 to help homeowners who experienced financial hardship due to the COVID-19 pandemic. It provided grants of up to $65,000 per household to cover delinquent mortgage payments, property taxes, insurance premiums, and Homeowner Association (HOA) fees.

Before its closure, the TXHAF program had a significant impact, distributing approximately $742 million in assistance to 58,536 Texas homeowners across 239 counties. For homeowners with questions specifically regarding a previously submitted and now closed application, inquiries can be directed to txhaf@tdhca.texas.gov.

Texas Emergency Mortgage Assistance Program (TEMAP): Program Closed

Similarly, the Texas Emergency Mortgage Assistance Program (TEMAP) is also closed. This program officially ended on January 4, 2023.

TEMAP was funded through federal CDBG CARES funds and was designed to provide short-term mortgage payment assistance for up to six months to eligible homeowners impacted by the pandemic. The assistance was administered through a network of local cities, counties, and nonprofit service providers rather than directly by the state.

What This Means for Homeowners Seeking Help Now

The closure of these large-scale grant programs marks a significant shift in the landscape of mortgage relief. It has created an information vacuum where much of the guidance found online is now dangerously out of date. Homeowners can no longer look to a state-run fund to apply for a grant to catch up on payments.

However, this is not a dead end. It signifies a return to the established, permanent channels for mortgage assistance that existed long before the pandemic. The focus for obtaining relief has pivoted away from applying for government aid and back toward direct, proactive engagement with mortgage servicers through a process known as loss mitigation, ideally with the free guidance of a professional housing counselor. This is the new, correct path forward for any homeowner facing financial hardship today.

Immediate Steps to Take if You Cannot Pay Your Mortgage

Given Texas's uniquely rapid foreclosure timeline, immediate action is not just recommended; it is essential. The following steps constitute an emergency action plan for any homeowner who anticipates missing a payment or has already fallen behind.

Step 1: Do Not Ignore the Problem—Contact Your Mortgage Servicer Immediately

The first and most critical step is to communicate with the mortgage servicer—the company to which the monthly mortgage payment is sent. It is a common misconception that servicers are eager to foreclose. In reality, foreclosure is a costly and undesirable outcome for lenders. They are often highly motivated to find a workable solution.

When calling the servicer, ask to speak directly with the Loss Mitigation Department or Home Retention Department. Be prepared to be honest and clear about your financial situation. It is vital to document every single interaction: for each phone call, record the date, time, representative's name, and a summary of the conversation. Confirm any agreements in writing.

Step 2: Contact a HUD-Approved Housing Counselor—Your Most Valuable Ally

The second immediate step is to contact a housing counseling agency approved by the U.S. Department of Housing and Urban Development (HUD). For services related to foreclosure prevention and delinquency counseling, these services are always free of charge.

A HUD-approved housing counselor is a certified, impartial expert whose job is to advocate for you. They serve several crucial functions:

• Assessment: They will conduct a thorough review of your finances, including income, expenses, and assets, to get a clear picture of the situation.
• Education: They will explain all available options in plain, easy-to-understand language, cutting through the complex jargon used by lenders.
• Advocacy: They can participate in calls with the mortgage servicer and help negotiate a loss mitigation solution on your behalf.

This service provides a critical buffer for homeowners who may feel intimidated when dealing directly with a large financial institution. The counselor acts as a translator, strategist, and advocate, ensuring you are treated fairly.

Step 3: Organize Your Financial Documents for the "Workout" Process

To engage with the servicer's loss mitigation department and a housing counselor, you will need to provide a complete picture of your financial situation. Gathering these documents in advance will significantly speed up the process. This collection of documents is often referred to as a "workout package" or "loss mitigation application."

The typical required documents include:

• Proof of Income: Recent pay stubs (usually for the last 30-60 days), or if self-employed, a recent profit-and-loss statement.
• Tax Documents: The last two years of W-2 forms and filed federal income tax returns.
• Mortgage Information: The most recent mortgage statement.
• Household Budget: A detailed list of all monthly household expenses (utilities, food, transportation, insurance, other debts, etc.).
• Bank Statements: Recent statements for all checking and savings accounts.
• A Hardship Letter: A brief, factual letter explaining the specific circumstances that caused the financial hardship (e.g., job loss, medical emergency, divorce).

Understanding Foreclosure Prevention: Your Loss Mitigation Options

"Loss mitigation" refers to the range of options a mortgage servicer can offer a borrower to avoid foreclosure. The goal is to find a solution that allows the homeowner to either get back on track with payments or exit the home without the severe credit damage of a foreclosure.

Home Retention Options: Staying in Your Home

These are the preferred solutions for both the homeowner and the servicer, as they result in the homeowner keeping their property.

• Forbearance: A temporary agreement where the servicer allows you to pause or make reduced mortgage payments for a specific period. Missed payments are not forgiven and must be repaid at the end of the forbearance period.
• Repayment Plan: If you have missed only a few payments, this plan allows you to catch up on the past-due amount over a set period by adding a portion of the delinquent amount to your regular monthly payment.
• Loan Modification: A permanent change to one or more of the original terms of the mortgage loan to make the monthly payment more affordable. This can be achieved by reducing the interest rate, extending the loan term, or adding the past-due amount into the principal balance and re-amortizing.
• Partial Claim (for FHA, VA, and USDA Loans): The loan's insurer may advance funds to the servicer to bring the mortgage current. This amount is placed into a second, subordinate lien on the property that is typically non-interest-bearing and due only when the home is sold or the first mortgage is paid off.

Home Disposition Options: When Staying is Not Possible

If your financial situation has changed so significantly that you can no longer afford the home, there are alternatives to foreclosure that are less damaging to your credit score.

• Short Sale: The servicer agrees to allow you to sell the property for an amount less than the total outstanding mortgage balance.
• Deed-in-Lieu of Foreclosure: You voluntarily transfer the title and ownership of the property back to the servicer in exchange for being released from the mortgage obligation.

The Texas Foreclosure Process: A Step-by-Step Timeline

Understanding the legal foreclosure process in Texas is critical because it is one of the fastest in the nation. The majority of foreclosures in Texas are non-judicial, meaning they do not require a court order and can proceed very quickly.

Phase 1: The Pre-Foreclosure Period (First 120 Days)

Under federal law, a mortgage servicer generally cannot make the first official filing for foreclosure until the loan is more than 120 days delinquent. This 120-day period is a critical window of opportunity to contact your servicer and submit a loss mitigation application.

Phase 2: Notice of Default and Intent to Accelerate (The 20-Day "Right to Cure" Letter)

Once the 120-day period passes, the servicer can begin the formal Texas foreclosure process. The first step is to mail a Notice of Default and Intent to Accelerate via certified mail. This legal notice gives the homeowner at least 20 days to "cure" the default by paying the full past-due amount.

Phase 3: Notice of Sale (The 21-Day Countdown)

After the 20-day cure period expires, the servicer sends a Notice of Sale by certified mail at least 21 days before the scheduled foreclosure sale date. This 21-day clock is the final countdown. The notice must also be:

• Posted at the door of the county courthouse where the property is located.
• Filed with the county clerk's office.

This process means a property can be legally sold at auction in as little as 41 days from the first formal notice.

Phase 4: The Foreclosure Sale

Foreclosure sales in Texas are public auctions held on the first Tuesday of every month at the county courthouse, between 10 a.m. and 4 p.m. The property is sold to the highest bidder.

Crucially, for most mortgage foreclosures in Texas, there is no statutory right of redemption after the sale. This means that once the property is sold at auction, the former homeowner cannot reclaim it. The sale is final.

Active Assistance Programs and Resources for Texas Homeowners

While large-scale emergency funds have ended, key state agencies still provide valuable resources. It is important to understand their function to direct your efforts effectively.

Texas Department of Housing and Community Affairs (TDHCA) Resources

The TDHCA is the state's lead agency for affordable housing. Although its direct mortgage relief funds are closed, it remains a vital information hub. The agency's "Help for Texans" web page is a searchable portal that can connect residents with local organizations providing various forms of assistance, such as help with utility bills or home repairs.

TDHCA's foreclosure prevention resources also correctly direct homeowners to the most effective sources of help: HUD-approved housing counselors and the national Homeowner's HOPE™ Hotline.

Texas State Affordable Housing Corporation (TSAHC) Programs

The Texas State Affordable Housing Corporation (TSAHC) is another key player, but its role is often misunderstood. TSAHC's flagship programs, "Homes for Texas Heroes" and "Home Sweet Texas Home," are designed to help eligible Texans buy a home, not provide foreclosure relief to existing homeowners.

These programs provide down payment assistance and favorable mortgage loans to qualified homebuyers, including teachers, veterans, and low-to-moderate-income families. While not a source for mortgage relief, TSAHC's website does provide valuable educational materials and directs struggling homeowners to the proper resources, such as HUD-approved counselors.

Finding Professional Help: Counseling and Legal Aid

Navigating a mortgage crisis alone is daunting. Fortunately, Texas has a robust network of nonprofit and legal organizations dedicated to providing expert guidance, often at no cost.

How to Find a HUD-Approved Housing Counseling Agency in Texas

Connecting with a free, certified housing counselor is the most effective step a homeowner can take. There are several easy ways to find a local agency:

• Online Search Tools: Both HUD and the Consumer Financial Protection Bureau (CFPB) host official, searchable online directories where you can enter your zip code.
• Toll-Free Hotline: Call HUD's housing counselor referral line directly at (800) 569-4287.

These agencies exist in every major metropolitan area, including Austin , Dallas , Houston , and San Antonio , as well as in smaller communities.

Texas Legal Aid Resources for Foreclosure

In situations involving a foreclosure lawsuit or complex legal issues, advice from an attorney may be necessary. For low-income Texans, several organizations may provide free or low-cost legal assistance:  

• Lone Star Legal Aid: Serves 72 counties in eastern and Gulf Coast Texas and provides foreclosure prevention assistance.
• Legal Aid of North West Texas: Offers legal help for housing issues, including foreclosure, in its service area.
• State Bar of Texas: Operates a toll-free legal hotline at (800) 504-7030 to connect low-income individuals with local legal aid providers. It also runs the Lawyer Referral & Information Service at (800) 252-9690 for those who can afford to hire an attorney.

Key Texas Mortgage and Foreclosure Prevention Resources

Strategies for Negotiating with Your Lender

Direct communication with a mortgage servicer is a negotiation. Being prepared can significantly improve the outcome.

Preparing for the Conversation

Before calling the servicer, have your financial documents organized and your hardship letter written. Be prepared to clearly and concisely explain the nature of the hardship and what type of payment is realistically affordable going forward. Honesty and a cooperative attitude can go a long way.

Leveraging Your Financial Standing and Other Offers

A history of on-time payments prior to the hardship demonstrates a commitment to meeting your obligation. If refinancing is a potential option, getting Loan Estimates from multiple lenders can be a powerful negotiation tool. A competing offer can sometimes persuade your current servicer to offer a more favorable modification.

Negotiating Fees and Loan Terms

While principal and interest are based on the original agreement, many fees associated with a mortgage can be negotiated, particularly during a modification. Always ask for a detailed justification for each fee. Fees like lender-charged origination, processing, or underwriting fees may be reduced or waived.

However, some costs are non-negotiable because they are set by third parties or government entities, such as:

• Property taxes and recording fees.
• The cost of the appraisal report.
• The fee for pulling a credit report.

Avoiding Foreclosure Rescue Scams

Financial distress attracts predatory scam artists who seek to profit from a homeowner's fear. These "foreclosure rescue" companies often make bold promises they cannot keep. It is vital to recognize the warning signs.

Red Flags of a Mortgage Relief Scam

Be extremely wary of any person or company that does the following:

• Guarantees they can stop a foreclosure. No one can guarantee this outcome.
• Asks for a large fee up-front. Legitimate HUD-approved counseling is free for foreclosure prevention.
• Tells you to stop making mortgage payments or to stop contacting your servicer. This is terrible advice.
• Asks you to make mortgage payments directly to them rather than the servicer.
• Pressures you to sign paperwork you do not understand or to sign over the title to your property.

How and Where to Report Suspected Fraud in Texas

If you encounter a company that displays these red flags, immediately cease contact and report them to the proper authorities.

• Texas Attorney General's Office of Consumer Protection: The primary state agency for investigating this type of fraud. They can be reached at (800) 621-0508.
• Consumer Financial Protection Bureau (CFPB): This federal agency oversees the mortgage industry and accepts complaints online or by phone at (855) 411-CFPB (2372).

Frequently Asked Questions