State: We'll pay your mortgage for a year

State: We'll pay your mortgage for a year »Play Video

PORTLAND, Ore. – If you are getting close to losing your home, this may sound unbelievable. But it's true.

The state of Oregon is about to pay your mortgage for a year ... if you qualify, and if you are one of the lucky ones who make it through.

Interested homeowners can apply online this Friday. From there, the state will choose applicants by lottery from the thousands of people who need help.

It's a welcome option for many in one southeast Portland neighborhood. After all, those we talked to said that leaving is not a choice.

"Yeah," says one neighbor, "suffering [is] all around us."

That's why Program Administrator Mike Kaplan says he wants you to apply under the Oregon Homeownership Stabilization Intitiative. You're eligible if you make 120 percent of the median income, which is about $74,000 for a family four, and if you've lost 25 percent of your income.

For those who meet all of the qualifications, this could mean their homes would be saved with money from the federal government. This money was given to states like Oregon with the highest rates of home foreclosures. (Washington state did not qualify for this federal "bail out.")

Under the program the government would pay 12 months of your mortgage payments, or $20,000, whichever comes first.

"We need to do something to help people out, one way or another," said one person we spoke with.

To be sure, the year-long payments are technically a loan, but at no interest. And the government will forgive 20 percent of the loan for every year you stay in your home.

If you stay in the home for five years, which equals 100 percent, you don't have to repay the loan and you don't have to pay income tax on the "gift."

"That's a smart program," said one interested participant. "That's a win-win all the way around. And it's not a negative when it's finished, so I think that's a great idea."

You can apply for the program beginning Dec. 10. Applications remain open through Jan. 14.

The problem, however, is that too many people are in need.

There are 5,000 spots, with 20,000 to 30,000 expected to apply for their chance at a $20,000 "lottery." By luck and a little paperwork, some people will get to keep what they almost lost.

"If it happens, I hope it does, I hope it has a positive effect," said one southeast Portland neighbor.

Note that the state wants you to stay in your home. This goal is behind the " foregiveness" part of the loan. It also means that, if you sell within five years, you may have to repay some of the money.

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