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HAF Assistance Protects 300,000-Plus Homeowners From Foreclosure

The U.S. Department of the Treasury has released data on the Homeowner Assistance Fund (HAF) through March 31, 2023 (Q1 of 2023), which shows a substantial increase in assistance to homeowners at risk of losing their homes.

As of March 31, HAF programs made approximately $3.7 billion in payments to more than 318,000 homeowners at risk of foreclosure. In Q1 of 2023 alone, HAF programs distributed $1.2 billion in assistance to households–a 50% increase over Q4 of 2022. Additionally, 14 states and two U.S. territories have expended more than 50% of their HAF program funds, excluding administrative expenses.

The Treasury Department’s data also shows that HAF programs are reaching a higher proportion of economically vulnerable and traditionally underserved homeowners than previous federal mortgage assistance efforts.

As of the close of Q1, 49% of HAF assistance was delivered to very low-income homeowners, defined as homeowners earning less than 50% of the area median income (AMI). Demographically, 35% of homeowners assisted self-identified as Black, 23% self-identified as Hispanic/Latino, and 59% self-identified as female.

“The Homeowner Assistance Fund has helped keep hundreds of thousands of families in their homes,” said U.S. Deputy Secretary of the Treasury Wally Adeyemo. “As state programs assess their remaining HAF funds, the Treasury Department will continue working with recipients to ensure these funds are swiftly delivered to homeowners most in need.”

On March 11, 2021, in response to the COVID pandemic and in an effort to combat the negative economic impacts of the virus, President Joe Biden signed The American Rescue Plan Act of 2021 into law. The Act established HAF, a measure drafted to provide up to $9.961 billion in financial relief for homeowners nationwide. HAF remains a key component of the Biden Administration’s efforts to help families across the country remain in their homes, which include a foreclosure moratorium, increased options for mortgage payment forbearance, and enhanced loan modifications to resolve delinquencies. As many foreclosure protections wound down in early 2022, HAF programs stepped in to provide timely assistance informed by earlier housing initiatives.

Examples of states that have demonstrated particular success in deploying HAF resources to prevent foreclosures, reach particularly vulnerable communities, and keep families in their homes include:

  • Puerto Rico's HAF program prioritized outreach to the most vulnerable homeowners through partnerships to increase awareness of HAF. Puerto Rico’s internal reporting shows that, to date, the HAF program has disbursed 100% of its allocation. Puerto Rico’s HAF program estimates it assisted 8,983 homeowners overall, including 1,014 homeowners who were previously on a waiting list, allowing the program to extend its support to an even larger number of individuals and families.
  • Louisiana’s HAF program launched a statewide television, radio, and social media campaign to increase its reach to homeowners most in need. The program also worked with local stakeholders, such as housing counselors and community organizations, to raise awareness. As of March 2023, the state reported that 85% of the homeowners assisted were socially disadvantaged and 96% of homeowners assisted had incomes below the area median income. To date, the state has obligated nearly all of its funds.
  • Minnesota contracted with nearly a dozen non-profits that had existing relationships in different underserved communities and housing developments. These non-profits knocked on doors, put up flyers, and hosted in-person events and workshops to increase awareness and build trust among interested homeowners. In turn, the state helped these grantees build capacity and provided training to ensure compliance with federal requirements of the HAF program.
  • The Indiana Housing and Community Development Authority (IHCDA) realized that income verification created a bottleneck for processing applications. By collaborating with Indiana’s Emergency Rental Assistance (ERA) program–another Treasury-led program–the state’s HAF program learned about the benefits of using an applicant’s proof of receiving federal benefits as a proxy to verify the applicant’s income. This helped streamline the applicant eligibility screening process for staff and reduce the documentation burden for applicants.
  • New York employed a multi-pronged approach to reach more underserved populations. First, the HAF program contracted with community-based organizations to promote outreach to key populations, including outreach to non-English speakers. Additionally, the state conducted virtual town halls with elected officials to build awareness and worked with culturally competent housing counseling agencies to provide access to homeowners needing additional assistance. Further, to streamline the application process, the state uses a third-party verification process to confirm eligibility, identity, and income based on data from the New York Department of Labor.

Legal League 100’s Special Initiatives Working Group (SIWG), a professional association of financial services law firms driving progress in the mortgage servicing industry, recently authored a White Paper, The Homeowner Assistance Fund: The Current Status of the HAF Program in Select Jurisdictions, detailing how HAF provided relief for homeowners in U.S. states, territories, and Tribal governments during the pandemic.

Legal League 100’s White Paper specifically breaks down HAF funds disbursed to the following 10 states: California, Delaware, Florida, Illinois, New Jersey, New Mexico, New York, Pennsylvania, Texas, and Washington.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.

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