The coronavirus pandemic has taken a very large toll on society, from a health, emotional, and financial standpoint. The US government has attempted to ease the burden in a variety of ways, from sending out stimulus checks to establishing a dedicated COVID-19 website. As part of the American Rescue Plan, ten billion dollars has been allocated to the Homeowners Assistance Fund as a way to help borrowers who are having trouble paying their mortgages.
The American Rescue Plan outlines usage for $1.9 trillion dollars, including the $10 billion meant for the Homeowners Assistance Fund. The plan was passed in March 2021 by Democrats with the intent that money from the fund would then be used to prevent missed payments, foreclosures, and other problems that homeowners might face. This money may also be used for expenses such as overdue property taxes, HOA dues, internet service, and more.
Each State Will Receive $50 Million
Through the Treasury Department, each state (plush Puerto Rico and Washington DC) will get a minimum of $50 million that they will then disburse to qualified homeowners who apply to housing programs. In addition, funds will be distributed to US Tribes, the Department of Hawaiian Homelands, and other US territories. This money must be completely used up by September 30, 2025.
States must disburse a minimum of 60% of the funds to homeowners with an annual income lesser than the local or national median income (whichever is greater). The national median income was $35,977 as of 2019.
Do You Qualify?
In order to qualify, borrowers cannot owe more than $548,250 on their mortgage as of 2021. Furthermore, they also have to have experienced a financial hardship sometime after January 21, 2020, which is just before the coronavirus pandemic hit the United States. A financial hardship is often considered to be a job loss, divorce, illness, death in the family, or another type of tragedy. Those who have suffered worse hardships will be prioritized. Individuals should contact their state housing agency for more information and to find out how to apply.
As September comes to an end, it’s estimated that approximately 1.7 million borrowers will have their forbearance period expire, meaning that they will need to start making their mortgage payments again. Over 3 million borrowers are delinquent on their monthly mortgage payments. As the foreclosure moratorium has already expired, lenders may start the foreclosure process over the coming months for certain delinquent borrowers. The Homeowners Assistance Fund will hopefully provide homeowners in need with a cushion to help make their payments.
If you’re struggling to make your mortgage payments, in addition to seeing if the Homeowners Assistance Fund is right for you, you may be able to see if you can qualify for other mortgage relief programs. RateZip lists mortgage relief options by state, as well as plans by twenty of the nation’s most common financial institutions. As always, you should contact your lender to see what help they may be able to provide. And you can read up on other financial information right here on RateZip.
