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Federal Government to Rescue Endangered Credit Report

By Faye Mergel
Published: Saturday, October 31st, 2009

Residents of Spartanburg County who are homeless or are on the verge of homelessness may soon receive help with rent, utility bills, and other services. Experts say the aid is extremely significant, since the creditworthiness of homeowners suffer greatly when a foreclosure appears on their credit report.

Federal Government to Rescue Endangered Credit ReportFederal government has recently awarded more than $500,000 to Spartanburg County through a measure called the Homelessness Prevention and Rapid Re-Housing Program. It is part of the American Recovery Act signed by President Barack Obama on February 17 this year.

According to the official website of the U.S. Department of Housing and Urban Development, the Act allocated $1.5 billion for a Homelessness Prevention Fund. Spartanburg residents who will qualify for aid will be given funds for back rent and short-term rental assistance.

A non-profit organization called the Upstate Homeless Coalition of South Carolina will administer the funds, totaling to $532,752. A coalition representative announced that the funds will be utilized in Spartanburg County within the next 30 months, in line with federal government plans. However, Upstate believes that the funds will not last that long because of the immense need of the residents.

To qualify for aid, residents must have an income 50 percent or less of the median earnings. That totals to about $54,000 for a family of four. They are also required to show proof that they are homeless or are about to lose their home and cannot avail any other help or resources.

After receiving aid, residents must be able to get a lease or pay rent. Volunteers say it would be better if residents are able to take over and pay their own lease after receiving help.
Experts say the aid is very significant since many low-income residents are unable to get loans because of their poor credit report. They add that low income combined with mortgage delinquencies are negative items on a report which lenders avoid. Consumers who often pay late pose great risks to lenders, experts explained. Creditors know how well a consumer meets his debt obligations since late payments and delinquencies are recorded on a credit report.

Eligible Spartanburg residents who qualify for aid are expected to get back on good financial track and eventually able to finance their rent independently. The coalition says it is willing to do its best to help homeless consumers overcome barriers, such as past evictions and flawed credit report.

The director for Upstate Homeless Coalition stressed that the financial assistance is allocated for rental housing only, and not for mortgages.

Residents who want to apply are requested to bring a Social Security card, an income verification, and a picture ID.

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