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12 Pa. Code § 31.202. Eligibility for mortgage loan assistance.

§ 31.202. Eligibility for mortgage loan assistance.

 (a)  Property must be all of the following:

   (1)  A one- or two-family owner-occupied residence.

   (2)  Secured by a mortgage, or other security interest in the case of a cooperative or condominium.

   (3)  The principal residence of the mortgagor.

   (4)  Located within this Commonwealth.

 (b)  A mortgage which is insured under Subchapter II of the National Housing Act (12 U.S.C.A. § §  1707—1715z-25) and mortgages where the secured property is used primarily for commercial or business purposes are not eligible for assistance.

 (c)  A mortgage held by a noncorporate seller is not eligible for assistance unless the noncorporate seller elects, in writing, in the mortgage or elsewhere to be covered by sections 103 and 401-C—409-C of the act (35 P.S. § §  1680.103 and 1680.401c—1680.409c). This election may be indicated by the issuance of an Act 91 notice—see Appendix A.

 (d)  A mortgagor is not eligible for a mortgage assistance loan if any of the following apply:

   (1)  The mortgage is more than 24 months delinquent or in default for more than 24 months under the terms of the mortgage.

   (2)  The aggregate amount of assistance needed to bring the mortgage delinquencies current exceeds $60,000.

   (3)  The property is encumbered by more than two mortgages, other than a mortgage filed by the agency to secure repayment of the mortgage assistance loans, or by other liens or encumbrances which would unreasonably impair the security of the Agency’s mortgage as determined by the Agency.

 (e)  The mortgagee shall have indicated to the homeowner, using the notice referred to in Appendix A, its intention to foreclose or initiate other legal action to take possession of the secured real property. This notice need not be sent to homeowners who do not qualify under subsection (a), (b), (c) or (d).

 (f)  If a homeowner is in bankruptcy and the automatic stay under 11 U.S.C.A. §  362 is still in effect, the lender is legally prevented from foreclosing. A homeowner who has been sent the notice referred to in Appendix A may apply to the Agency for a mortgage assistance loan while protected by the automatic stay. If the Agency approves the application and the homeowner is still protected by the automatic stay, the approval will be contingent upon the trustee and the bankruptcy court approving the incurring of the mortgage assistance loan by the homeowner.

 (g)  The homeowner shall meet all of the following requirements:

   (1)  Be a permanent resident of this Commonwealth.

   (2)  Have had a favorable residential mortgage credit history for the previous 5 years, as determined under §  31.205(c)(5) (relating to financial hardship due to circumstances beyond the homeowner’s control).

   (3)  Be suffering financial hardship due to circumstances beyond his control which renders the homeowner presently unable to correct the delinquencies within a reasonable time and unable to make full mortgage payments. In determining if circumstances are beyond the homeowner’s control, the Agency will consider the homeowner’s credit history, employment record, assets, current and past household income, net worth and other relevant factors.

   (4)  Have a reasonable prospect of resuming full mortgage payments within 24 months after the beginning of the period for which assistance payments are provided by the Agency and be capable of making any payments then remaining due on the mortgage in full by the maturity date or a later date to be agreed upon by the mortgagee.

   (5)  All owners of the residence shall execute—either personally or through a valid power of attorney—the mortgage and other related loan documents required by the Agency, except as follows:

     (i)   When the residence is owned by spouses who are separated and the applicant is occupying the mortgaged premises.

     (ii)   When the residence is jointly owned by former spouses, who are divorced, and the applicant, who is occupying the mortgaged premises, is unable to locate a former spouse or the applicant is unable to obtain a former spouse’s consent to join in the application or sign the Agency’s loan documents.

   (6)  When an individual has acquired the residence through inheritance, is able to demonstrate ownership of the residence, has assumed the mortgage and is occupying the mortgaged premises, the individual may be eligible for mortgage assistance provided that all other eligibility criteria are fulfilled. When more than one individual acquires a residence through inheritance, all owners of the residence shall execute—either personally or through a valid power of attorney—the mortgage and other related loan documents required by the Agency.


   The provisions of this §  31.202 amended through June 13, 1986, effective June 14, 1986, 16 Pa.B. 2126; amended July 1, 1994, effective July 2, 1994, 24 Pa.B. 3224; amended June 4, 1999, effective June 5, 1999, 29 Pa.B. 2859; amended April 29, 2016, effective April 30, 2016, 46 Pa.B. 2171. Immediately preceding text appears at serial pages (336302) to (336304).

Notes of Decisions


   Requiring all co-owners to apply jointly for mortgage assistance is plainly within the scope of authority delegated to the Housing Finance Agency. Anela v. Housing Finance Agency, appeal granted 675 A.2d 1252 (Pa. 1996); reversed 690 A.2d 1157 (Pa. 1997). (Editor’s Note: The court cited former 16 Pa. Code §  40.202 in its decision. 16 Pa. Code §  40.202 was renumbered as 12 Pa. Code §  31.202, at 27 Pa.B. 2415 (May 17, 1997).)

   Bankrupt Mortgagor

   A debtor in bankruptcy may only receive emergency mortgage assistance from the Housing Finance Agency if the automatic stay has been lifted. Watts v. Housing Finance Agency, 876 F.2d 1090 (3rd. Cir. (Pa.) 1989).

   Construction with Statutes

   The enabling statute, 35 P.S. §  168.401(c)(a)(2), will not be read narrowly by reason of a grammatical interpretation so as to exclude one-family dwellings from the ‘‘owner-occupied’’ requirement for emergency mortgage assistance; therefore this section is consistent with the statute. Hawkins v. Housing Finance Agency, 595 A.2d 712 (Pa. Cmwlth. 1991).

   Evidence of Ownership

   While the Housing Finance Agency may not base a determination of ownership on compliance with the recording laws for purposes of 35 P.S. §  1680.402(c) governing mortgage assistance they may require recordation as evidence of ownership under the housing finance regulations in the Pennsylvania Code. Land v. Housing Finance Agency, 515 A.2d 1024 (Pa. Cmwlth. 1986).

   Joint Applications

   This policy statement requiring all co-owners, except separated spouses or ex-spouses, to jointly apply for mortgage assistance conflicts with 35 P.S. § §  1680.401c—1680.411c. Anela v. Pennsylvania Housing Finance Agency, 663 A.2d 850 (Pa. Cmwlth. 1995).

   Physical Presence

   The occupancy requirements which must be met in order to be eligible for emergency mortgage assistance require physical presence in the dwelling and assistance was properly denied to an incarcerated applicant. Hawkins v. Housing Finance Agency, 595 A.2d 712 (Pa. Cmwlth. 1991).

Cross References

   This section cited in 12 Pa. Code §  31.203 (relating to notice; application procedures); 12 Pa. Code §  31.204 (relating to Agency review); and 12 Pa. Code §  31.210 (relating to periods of high unemployment).

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