Strategies & Resources

Tax foreclosure is often an issue for seniors and individuals who own their home outright and do not possess a mortgage. Given the high penalties and fees associated with late payment, homeowners who live on a fixed income find out about their tax delinquency when the bill has grown to an unaffordable level. A hardship extension may allow these homeowners to defer the payment of these back taxes, if they are able to demonstrate a limited income. Local legal services, HUD and MSHDA-certified counseling agencies and community action agencies should be able to assist homeowners in filing the hardship extension, after which the County Treasures Office will process the application.

Most County Treasures will work with a tax-delinquent homeowner to help them enter into a repayment plan that can defere the tax foreclosure process. While there are few resources to assit tax-deliquent homeowners, many are able to access their Michigan State Emergency Relief  homeownership services fund (pdf). This fund, designed to help low-income Michigan residents save their home from tax foreclosure, allows for $2,000 per individual lifetime to assist with homeownership service payments. These funds are administered through the Michigan Department of Human Services. Homeowners can also consider a reverse mortgage or home equity line of credit, which allows homeowners to borrow against the equity of a home to pay current bills.

For very low-income property owners, Michigan law allows for a poverty exemption from local property taxes only when applied for in the year that taxes are actually owed. Most local legal services offices, HUD and MSHDA-certified counseling agencies, and community action agencies can assist homeowners in completing such applications, which are then subjected to final approval by the local (city, township, and village) assessor’s office. Policies vary across locality and one should check with the local assessor on the standards for obtaining a poverty exemption, but many tax commissions want to certify that the homeowner’s income is at or below the poverty level, that the homeowner has limited assets from which to draw, is using the home as their primary residence, and no other occupants of the home have the means to assist in paying the taxes.

The Step Forward Michigan program has also been recently expanded to provide financial assistance to homeowners who have suffered a hardship which has caused them to get behind on their taxes. Check out at www.stepforwardmichigan.org

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