The Oregon Housing and Community Services (OHCS) department and Sen. Jeff Merkley, D-Ore., announced the launch of a pilot program designed to provide lower interest loans to Multnomah County homeowners whose mortgages are higher than their homes are worth.

The Rebuilding American Homeownership Assistance Pilot Program began accepting applications online at noon Wednesday, June 12.

This program aims to help homeowners trapped in high-interest mortgage loans but who can’t refinance because their loans are underwater, or they owe more than their homes are worth. These homeowners are current on their loans but not eligible for the Federal Home Affordable Refinance Program because their loans are not owned or insured by Fannie Mae or Freddie Mac, said Ben Pray, spokesman for the state’s housing and community services department.

The pilot program is based on a proposal that Merkley introduced in July 2012 for rebuilding American homeownership.

“Current programs have been frustrating for homeowners who are underwater and not eligible for HARP (federal Home Affordable Refinance Program ),” Merkley said. “This pilot tests a different approach. If successful, it could be a win-win, substantially lowering homeowners’ monthly payments and thereby reducing the risk of foreclosure. Moreover, the homeowners would have more funds to spend on other needs, strengthening their families and the local economy. Finally, the program has the potential to pay for itself. If it works, I hope it can be expanded to help underwater families across Oregon and in other states. I applaud OHCS for piloting this different approach.”

The pilot will allow an initial group of approximately 50 underwater homeowners who are current on their mortgage payments to refinance into a 30-year fixed-rate of 5.0 percent (5.077 percent annual percentage rate) or a 15-year fixed-rate of 4 percent (4.129 percent APR). There will be no up-front or monthly mortgage insurance payments required for the new pilot program’s loans.

Interested homeowners in Multnomah County are encouraged to visit the pilot program’s website at for information, an eligibility quiz and an online application form. Homeowners will be able to submit applications online or in person through OHCS partner Alpine Mortgage Planning, a division of Pinnacle Capital Mortgage Corporation.

The Rebuilding American Homeownership Assistance Pilot Program is funded by “Hardest Hit funds” that the state received from the U.S. Treasury. Oregon Housing and Community Services administers Hardest Hit funds through the Oregon Homeownership Stabilization Initiative (OHSI), which to-date has provided more than $92 million in assistance to more than 9,000 homeowners.

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