The state of Oregon wants to pay your mortgage.

It's not a joke or a scheme, but too few people have signed up for the help.

"Maybe they think it's too good to be true," says Catherine Kes, Director of Housing Development at Hacienda CDC, the agency that is administering the program.

The state is prepared to help homeowners who have experienced job loss or a reduction in income, by paying their mortgage for 12 months or $20,000, whichever comes first. Qualified applicants need to complete an application by Jan. 14 and schedule an appointment by Jan. 16 with Hacienda CDC to enter the lottery for 5,000 slots.

Lisa Joyce, communication manager for Oregon Housing and Community Services, says the agency isn't in the business of deciding which family's need is greater than any others. By establishing guidelines relating to income loss, income, liquid assets, and other criteria, she says they can more fairly administer limited funds.

Right now, Kes says that fewer than 5,000 qualified homeowners across the state have signed up, making it pretty decent odds to receive the money.

"It's a pretty simple process," she said.

Once you've determined your eligibility by asking some simple questions on www.oregonhomeownerhelp.org, you have to meet with a representative and provide documentation to prove your eligibility. If you are awarded the money through the program, eligibility must be established every month or you risk losing the assistance.

Kes wants to assure people that the assistance comes with very few catches. Namely, so long as you don't sell your house and profit from that sale within five years, you won't have to pay back the money. And because the assistance is packaged as a forgivable loan, it won't affect your taxes.

"If you sell your house because you realize can't afford it and don't make money, then you don't have to pay anything back," she said.

Hacienda has set up an intake site at the Doubletree Hotel at Lloyd Center Exhibit Hall, 1000 NE Multnomah to process applications from 9 a.m. to 9 p.m. Monday through Friday and 9 a.m. to 5 p.m. on Saturdays. Homeowners can call 503-961-6432 with any questions about eligibility and required documentation.

In the office, Joyce has heard many sad stories from homeowners trying to stay in their homes. One woman is struggling to recover from cancer, which cost her her job and her ability to make mortgage payments. The number of construction workers who can't find work is too large to count.

"Their self-worth is being eroded daily," she says.

That's when the agency's other programs may help. Set to be launched in the early part of 2011, Oregon Housing and Community Service will be starting programs designed to help people move who are living in unaffordable homes; provide assistance for fees and fines for people who have regained employment and are recovering from missed payments; and loan modification assistant program to help move a loan into a lower interest rate.

Qualifications for the mortgage assistance program:

•    The household's income cannot be equal to or more than 120 percent of state median income. A homeowner who has an Oregon bond loan meets this test. For details, see the State Median Income Table.

•    The homeowner's current firt mortgage must date before January 1, 2009.

•    The homeowner must be unemployed or have a verifiable loss in income of 25 percent or more.

•    The homeowner cannot have more than four months of mortgage payments available as liquid assets. (Retirement and education savings accounts are OK).

•    The homeowner must complete and sign a Financial Hardship Affidavit.

•    The homeowner, in connection with a mortgage or real estate transaction, cannot have been convicted, within the last 10 years, of any one of the following: (A) felony larceny, theft, fraud or forgery, (B) money laundering or (C) tax evasion.

•    The subject property must be an owner-occupied, primary residence and be located in Oregon. Manufactured homes are eligible only if the structure is recorded in the county's deed records. *Note: Condominiums and Town homes are NOT considered single-family, 1-unit, detached homes.

•    The homeowner's unpaid mortgage balance cannot exceed $729,750.

•    Homeowners who have received notification of trustee/sheriff sale before February 1, 2011 are ineligible for the MPA program.

•    Homeowners who own other residential real property are ineligible for the MPA program.

•    Homeowners who are currently in active bankruptcy are ineligible for the MPA program.

•    Any homeowner who knowingly submits more than one application for the MPA program is ineligible.