States are preparing to distribute nearly $ 10 billion in aid to homeowners who have been severely affected during the pandemic. So how can struggling homeowners queue for the cash? The Homeowner Assistance Fund, created by the latest COVID-19 relief package, provides allocations to states, U.S. territories, and tribes with the goal of avoiding mortgage delinquencies, foreclosures, utility outages, and other problems for vulnerable homeowners.
To qualify, homeowners must have a lower income and have suffered financial hardship, such as job loss or significant health care expenses, after January 21, 2020. Help is not limited to mortgage borrowers: homeowners in need of help with property taxes in arrears, homeowners association fees, internet service and other expenses may be eligible. While states are still designing their HAF programs and it may take several months to begin distributing the aid, homeowners can now position themselves to be a part of the action, housing advocates say. Mortgage borrowers who are struggling and have not yet spoken with their loan servicers should make that decision now. Find out if you qualify for a forbearance that temporarily suspends your payments, a loan modification that can lower your monthly payment, or other options. “You will be in a better position to access state money if you have already contacted your administrator” and evaluated what options are available to you now and what additional help you might need, says Julia Gordon, president of the National Community Stabilization Trust, a non-profit organization. profit organization that works to protect neighborhoods from the plague. Borrowers and servicers should also focus on long-term solutions now to avoid “chaos” in the fall when a wave of distressed borrowers emerges from forbearance, says Diane Thompson, senior advisor to the Consumer Financial Protection Bureau. When you contact your manager, “document everything,” says David Dworkin, executive director of the National Housing Conference. “And keep those records.” Create a file, Dworkin says, that includes any evidence of the pandemic’s impact on your financial situation, such as layoff notices, unemployment insurance income, and documentation of your pre-COVID income. For additional help, contact a housing counseling agency approved by the US Department of Housing and Urban Development.These agencies will work to help homeowners eligible for the HAF program. The CFPB offers a tool to help you find a counselor in your area.