H.R.237-Bill To Amend the DoD HAP Timeline

As must of you know who read my posts I’ve had the good fortune to work with a number of military families in the Northern Virginia area who are eligible for the Department of Defense Homeowners Assistance Program (HAP). The HAP program helps military families who are upside down on their mortgage get relief by covering between 90-95% of the difference between current market value and their original purchase price.

This week Rep Gerald Connolly (D-VA) introduced a bill to amend the current HAP program to allow the Secretary of Defense flexibility regarding the start date for eligible home purchases. Currently the start date is homes purchased on or before July 1, 2006. Here is a real life example of the difference a few weeks can make.

This summer, in the same neighborhood I had two listings. Both were active duty military families. One family bought their home just before the July , 2006 date. The other bought their home 3 weeks later. One family sold their home with HAP benefits and there was no impact on their credit. The other family had to undertake a short sale. The lender required them to be 30 days late on their loan. So there credit was hurt. These houses were two blocks apart and the impact of the market was identical for both families.

Though the bill is in it’s early stages it could have a major impact on military families throughout the country if it can make it through committees. If you are in favor of supporting this bill I encourage you to send your support of the bill to your Congress person and or Senator.

20 thoughts on “H.R.237-Bill To Amend the DoD HAP Timeline

  1. Thanks Cindy! I purchased my home on July 11th 2006. These TEN DAYS will potentially cost me $100K! As you mentioned in your article, the arbitrary date of 1 July can have a significant impact on those of us who purchased our homes just 2 weeks later. I have spoken to the HAP representatives who claim that after 1 July, there were clear “indications” of a falling market and that “I should have known better”. Unbelievable. I hope that this bill passes. I have contacted my congressman and highly recommend everyone in similar circumstances to do the same.

  2. James-I had another family who missed the date by a few weeks as well. We ended up completing a short sale but certainly some flexibility, within reason, would assist many more such as yourself.

  3. Cindy how did the short sale affect your credit? We purchased our home in 2007 and have hadit on the market for 77 days and nothing. Dropped the price twice. We are due to relocate at the end of the January.

  4. Trina-this was not my personal property that sold but one of my clients. The amount your credit score will drop depends on a number of factors:

    How many payments did the borrower miss?
    What language did the lender use in their short sale approval letter.

    Scores can go down anywhere from 50 points to 150 points but each circumstance is different.

  5. Cindy,

    We are applying for HAP and are trying to get amendments to my orders (cut on 02 Dec 2010 even though I was notified/selected for assignment on 31 March 2010 but had to deploy for 6 months immediately after notification). Do you know if there are plans to amend/extend HAP to allow for orders cut after 30 Sep 2010? I’ve read and re-read the bill and it states that it could go past 30 Sep 2010 “based on availability of funds” but I haven’t been able to get a straight answer on if funds are available. What does the appeal/exception to policy process consist of? Thanks!

  6. Cindy
    I am current on my mortgage loan. We just can not afford to do it much longer without leaving us with nothing. I just want some to give me some guidance on what is out there to help us. I am just so tired of I am sorry.

  7. Jen at this point there has not been an announcement of an extension of the date. Certainly if one comes I’ll be all over it but my conversation with Savannah this week say they are still working from 9/30/2010 backwards at this time.

  8. Cindy,

    This is great news. When we PCS’d the only thing we could do was put the property up for rent and eat $350/mo on it. I would’ve used the HAP but I bought it in October 06, just a few months too late. And what I’ve read about the bill they’re introducing it because the market was still in decline months after July 06.

  9. Matt,

    The issue of whether they can extend the date for when homes were purchased OR extend the PCS order date to September 30, 2012 seems to be all about funding. Their are still a significant number of applications for owners who purchased before the current dates. I would hope that Congress and the DoD would look for additional funding so that as many families as possible could take advantage of the program.

    Cindy

  10. We purchased in June 2005 and live in Suffolk,Virginia. We have been given orders to pcs to florida in august 2011. My agent told me about HAP and I just dont know whether to go forward with it since the sept 2010 date has not been extended or to rent it out. Im so burdened with all of it. Also, after researching HAP, it sounds like it is essentially a short sale. Is your credit affected by using HAP? How long does the whole process take?

  11. Lori,

    I just posted a video about HAP and credit scores. The answer is NO if you have remained current on your payments then there is not impact on your credit. At the moment there has not been an official extension of PCS dates. Since it is still early you may want to wait a few months to find out if the extension is formally approved before you decide whether to rent or undertake a short sale.

  12. I can tell you that there was not a sharp obvious decline in house prices in Tampa Florida on July 14 when I put my bid proposal in on a home due to PCS orders. The only obvious detail was that homes were extremely expensive and the values fell much later in the year. Some branches of service don’t allow their members to transfer early and the normal PCS is June/July time frame. You can look for a house but when your doing it from over 1000 miles away you only get a few chances to make an informed decision based on kids, schools, and safe locations. Now that we are paying two mortgages I am not sure how we will make it through this year. If the HAP program would extend 30 or even 60 days past July 1st that would help a huge group of military that were forced to PCS. I have paid all my bills on time as do all of us and its tough to not be able to afford to do anything over the summer with the kids or any trips or vacations due to the “ball and chain” second home that can’t be sold or no renters due to the housing glut. What happend to the $555 million that was specifically set aside for this HAP program. I have a hard time believing they went through all that already and if so it should be transparent and posted where it went and what remains.

  13. Robert-all I can do is encourage ever member of the military to contact their Congressman & Senator to push for support for expanded dates for DoD HAP and more funding. My understanding on HAP funding that the funds are rapidly dwindling.

    I’m currently working with families who left Northern Virginia between 2007-2009 who have tenants in their homes. Leases are ending and they want to take advantage of HAP benefits. The number of families still in the thousands and with 50% price decline in some areas that amount of $$$ covered with each transaction can be significant. The 22 sales I’ve been involved in to date have mostly been 6 figure shortages.

  14. I purchased my home in Waldorf, MD July of 2006 and just missed the cutoff, like so many others. I now owe $57K and my credit is shot, and they are telling me that the only assistance they offer is to refinance the $57K at 0% interest for the next 20 years. I applied for assistance with USACE HAP, HOPE, Making Home Affordable, and the VA Loan Compromise pgm and they ALL DENIED ME HELP. I am at wits end and hope that congress does something with this bill. I have emailed and written to congressmen and Senators in MD, TN, NC, NM, and even Nevada to Dina Titus who had originally sponsored HR 4324 to do the same as HR 237. I have dealt with attorneys who all just want to take the retainer fees then brush me off with “your best bet is to file Bankruptcy” But with a Military Security Clearance, that is not an option yet…Please let me know if there is anyone out there who can help. This bill or some sort of help has to be out there for Military families. With 3 combat deployments and now on a 4th that just was extended to almost a year….I am doing my part to serve and help my country, all I ask is for the people on the hill to recognize that and lend a hand.

  15. Cindy,

    Does my mortgage balance need to be more than the current value of the house to be eligible for extended-HAP? Bought the house for $600K, current value is $435K, mortgage balance is $380K. I met all other eligibility requirements, but I cannot get a straight answer from the HAP folks about this. If I sell the house before I apply for ext-HAP (private sale), will I get reimbursed the difference between the orig purchase price and the sell price? Thank you for your assistance.

  16. John-no your current mortgage balance does not have to be above the current market value to be eligible for HAP benefits. If you meet all of the other criteria then you can undertake a Private Sale and request benefits after the fact. I recently closed one where the owners got the check after the sale as there mortgage balance was below the sales price. I would recommend that you go ahead and get your package together and in to HAP to get the preliminary “approval” before you proceed. Then proceed with your sale. You will not be reimbursed 100% of the prior FMV. It will be at 90% but if you use a Realtor® to help you with the sale their commission & your allowable closing costs are reimbursable at 100%. Be cautious if you plan to offer any assistance to the buyer as those costs are not covered and would come out of your net. ope that answers your question. The team at HAP is the final determination for your eligibility and the amount of benefits you will receive. Good luck.

  17. The last post was of particular interest to me….I am currently awaiting the sale of our house in Gloucester County, VA…I am stationed in Korea and wil be leaving in may, returning to VA, and then off to Cali. So, if i can lower my asking price to what is sure to sell, say, by another 15K, then i can still receive the HAP benefits? I’m just worried that i would not be eligible since the house is already sold. Do the benefits still apply to me?

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