Facing Foreclosure? HUD Offering Emergency Loans

If you're struggling financially to stay in your home and avoid foreclosure, the government may have a deal for you.

See also: Everything you need to know about reverse mortgages.

The U.S. Department of Housing and Urban Development is offering forgivable bridge loans of up to $50,000 to pay mortgage, tax and insurance bills for up to two years in certain states.

But there's a catch: You only have until July 22 to "pre-apply" for the funding through the Emergency Homeowners' Loan Program (EHLP).

Who is eligible? Homeowners who are 90 days delinquent on their mortgage and at risk of losing their home because of a job loss, reduction in income or serious medical condition are eligible for these funds. According to HUD, no payment is due on the EHLP loan during the five-year term if you remain current with your monthly mortgage payments and meet other program requirements. The balance due on the loan will drop in equal portions of 20 percent annually until it's gone.

What you need. After the pre-application process to learn whether you qualify, there are documents you'll need for the next stage of the application process:

• Most recent mortgage statement.

• Most recent residential utility bill.

• Written notice from your employer indicating termination or reduced income.

• Notice from your lender or servicer stating that you're at risk of foreclosure.

• The 2009 and 2010 tax returns for everyone listed on the mortgage.

• Unemployment check stub, pay stub or other documentation of your current income.

• Citizenship documents such as a passport or birth certificate for everyone listed on the mortgage.

• IRS T4506-T form for every person listed on the mortgage.

• Proof of flood insurance if you live in a flood zone.

Contact a HUD-approved EHLP housing counselo to learn where to submit applications in your area, or call 1-855-346-3345 toll-free.

Also of interest: Foreclosures through the roof. >>

Carole Fleck is a senior editor with the AARP Bulletin.