By: Melissa D. Francis, Esq.
In 2010, the Michigan State Housing Development Authority (MSHDA) received funding of $499 million dollars from the Federal Hardest Hit Program to provide financial assistance to homeowners left struggling after the recession and mortgage crisis. In response, MSHDA created Step Forward Michigan aka The Michigan Hardest Hit Fund (“Step Forward”).
Through the Step Forward program, MSHDA provides loans of up to $30,000.00 at 0% interest to qualified homeowners for payment of delinquent mortgages, property taxes, and homeowners’/condominium association assessments on their primary residence. Homeowners are only eligible to receive one loan from the program, but may utilize that loan to pay multiple qualifying debts. Homeowners do not need to make payments on these loans as long as they retain the property as their primary residence. Each year the property is retained as the owner’s primary residence, 20% of the loan is forgiven, after five years, the loan is completely forgiven and any lien on the property securing the loan is discharged.
Initially, it was anticipated that Step Forward would wind down operations and be out of funds by the end of 2017. However, as of October 2018, the program still had $19 million dollars left to disburse ( https://www.canr.msu.edu/news/how-to-apply-for-step-forward-michigan, October 12, 2018). As of the writing of this article, the program continues to operate and accept applications, even with their staff working remotely due to the COVID-19 crisis.
In order to receive funds on accounts for homeowners that qualify to receive assistance from Step Forward Michigan, homeowners’/condominium associations must complete and submit an application with supporting documentation to Step Forward Michigan. Once this documentation is reviewed and approved by Step Forward, the Association will be listed as a Participating Partner with the program. Participating Partners are listed on the Step Forward Michigan website. Currently, there are approximately 86 homeowners’/condominium associations which are participating in the program. In submitting the application, the association must agree, among other things, to communicate with MSHDA or the homeowner/co-owner regarding the outstanding balance on the account and accept payment from Step Forward via direct deposit from the State of Michigan.
If a homeowner qualifies to receive assistance and the association is already a Participating Partner, the money will be deposited into the association’s account shortly after Step Forward contacts the association for a payoff of the debt owing and the payoff is provided by the association. However, if a homeowner qualifies for assistance and the association is not a Participating Partner, the association will need to quickly complete the application and submit it to Step Forward for review and processing before they are able to receive funds. In some cases, the association’s application cannot be processed before the Homeowners’ Step Forward approval expires. In these cases, the homeowner will need to re-apply to receive assistance or agree to accept assistance only as to any other qualifying debts, knowing that they will not be able to apply for the program again and get assistance for the association debt.
With many homeowners experiencing an interruption in employment and the forecasting of an increase in delinquencies, association Boards should discuss and make a decision about becoming a Participating Partner with Step Forward Michigan. Becoming a Participating Partner with Step Forward Michigan allows the association to offer its owners another option in seeking assistance to pay the association and potentially the mortgage company and/or property taxing authority.
It is recommended that associations that are not currently Participating Partners apply for Step Forward as soon as possible to ensure that their applications are reviewed and processed before homeowners start their own application process. Please call our main office in Plymouth (734-459-0062) or email Ms. Francis (firstname.lastname@example.org) for information on how our office can assist your association in getting the Step Forward Michigan Participating Partner Application completed, or if you have any questions about the program.
Melissa D. Francis joined the Firm in 2013 as an associate attorney. She is a graduate of Plymouth-Canton High School and earned her Bachelor of Arts Degree in International Relations from Michigan State University’s James Madison College in 1998. She earned her Juris Doctorate from Wayne State University Law School in 2001. Ms. Francis is admitted to practice law in the State of Michigan, Federal District and Bankruptcy Courts for the Eastern and Western District of Michigan, and the United States Supreme Court. Ms. Francis has extensive experience representing both Creditors and Debtors in Chapter 7, 11, and 13 Bankruptcy proceedings. Since association collections matters routinely involve bankruptcy issues, her vast experience in that field provides the Firm with a unique resource that provides tremendous value to the Firm’s Clients. Ms. Francis is a member of the American Bankruptcy Institute. She was a speaker at the 2019 Community Association Institute Law Conference in New Orleans discussing Consumer Bankruptcy and its impact on Community Associations. She is also a speaker at the 2019 American Bankruptcy Institute Detroit Conference on Veteran’s Day.
Ms. Francis is a Past Dean of the Metro Detroit Alumni Senate of Delta Theta Phi Law Fraternity International. She is active in the Plymouth-Canton Community as a member of the St. Thomas A’Becket Church choir, BeckRidge Productions, Spotlight Players Theater Company, and the Plymouth-Canton Marching Band Alumni Community.