The federal government is prepared to give 45 struggling Central Texas homeowners as much as $50,000 each to keep them out of foreclosure — but only if they’re lucky and act fast.

Homeowners who are unemployed or underemployed and at least three months behind on their mortgage payments can apply for the Emergency Homeowner Loan Program.

A lottery will determine which 45 homeowners in McLennan and surrounding counties get the assistance. For the winners, the government will pay off delinquent mortgage debt and help with future payments for up to two years.

Neighborworks Waco is administering the regional program for the U.S. Department of Housing and Urban Development.

Neighborworks, a nonprofit homeownership agency, will hold outreach events at 2 p.m. and 6 p.m. today to sign up applicants at the Heart of Texas Workforce Solutions center at 1416 S. New Road.

The deadline for applying is July 22, and the applicants will be approved by Sept. 30.

“This program is basically acknowledging that we understand the economy is starting to drag people into foreclosure, not just the exotic mortgages from the housing bubble,” said Chad Klawetter, Neighborworks Waco homeownership center manager.

“It’s saying, ‘Here’s a lifeline to subsidize mortgage payments so you can keep your house while you’re looking for employment.’ ”

The program stems from the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and is set aside for the 32 states not covered by an earlier foreclosure relief program.

Texas is getting $135 million for the Emergency Homeowner Loan Program, more than any other state.

The loan is for homeowners whose income has declined by at least 15 percent since 2009 because of work loss or health-related issues and whose mortgages are now at least three months delinquent. The household income limit for the assistance is $75,000.

Recipients have to pay 31 percent of their income toward their monthly mortgage payment, with the government picking up the rest for two years or until the homeowner’s financial condition improves.

The subsidy of up to $50,000 will be considered a loan placed as a subordinate lien on the home, but it will be forgiven in five years, meaning it’s essentially a grant.

Klawetter said it’s unlikely many Central Texas homeowners will get the full $50,000, because some won’t need two years of assistance, and a typical homeowner in the Waco area pays only about $10,000 a year for mortgage principal and interest.

The $1 billion foreclosure assistance program is projected to help about 30,000 people nationwide, and only about one-third of applicants are expected to win the assistance.

Eric Zadnik, president of the Waco Association of Realtors, said high foreclosure rates can cause havoc in local housing markets, and some government efforts to stem foreclosure have been helpful.

He said the program likely will have a limited impact on McLennan County, compared to some parts of the country where foreclosures are rampant. The county had 82 foreclosures last month.

“In McLennan County, I don’t see it affecting the market as much as other parts of the country, unless you’re in a neighborhood with four or five foreclosures on one street,” Zadnik said.

He noted that half of McLennan County home sales are less than $100,000, and it might have been better to spread the money around to more than 45 homeowners.

“It would almost be better if it was $25,000 — then you could help twice as many people,” he said.

Klawetter agreed that the effects of the program won’t be widely visible here.

“I don’t think it will make any significant dent in the long term,” he said. “I think it’s going to help a few people who meet a specific set of criteria, but in the long term we need the economy to improve. We need more jobs for people, and we need more educated homebuyers. We need people to put as much time in learning to buy a house as they do learning to buy a car.”

For more information, call Neighborworks at 752-1647 or visit www. nw-waco.org.

jbsmith@wacotrib.com

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