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HAF at Three-Years Old: Building on Lessons Learned from HHF

The American Rescue Plan’s Homeowner Assistance Fund (HAF) has played a critical role in helping families avoid foreclosure. At the peak of the COVID-19 pandemic, an estimated 2.4 million homeowners had fallen three or more months behind on their mortgage payments, with many at risk of losing their homes and in some cases years of invested savings.  Homeownership is the largest driver of savings and asset building for families outside of the wealthiest 10%. Further, studies have shown that housing displacement has detrimental and long-lasting effects on children.  Upon taking office, the Biden-Harris Administration took swift action to build on lessons learned from the 2008 financial crisis to strengthen homeowner protection measures—including a foreclosure moratorium, increased options for mortgage forbearance and loan modifications, enhanced unemployment benefits, and nearly $10 billion through HAF to enable homeowners to prevent mortgage delinquencies, mortgage defaults and mortgage foreclosures. 

Over the past three years, the speed and strength of the Biden-Harris Administration’s economic response prevented the worst  outcomes anticipated from the COVID shock and fostered the fastest – and fairest – economic recovery in recent history. The Administration went beyond tackling employment rates and poverty levels to address other factors that contribute to economic well-being, like housing stability. Since the passage of the American Rescue Plan in March 2021, states, Tribal governments, and territories have distributed $6.6 billion HAF award funds to more than 500,000 homeowners for past due mortgage payments, utility expenses, and property taxes, as well as other housing related expenses. HAF provided a lifeline to homeowners at a time when refinancing or other workout options have been limited. 

Despite fears of a foreclosure crisis after the expiration of the moratorium, foreclosures remained low. Today, foreclosure starts are about 30% below pre-pandemic levels. In addition to helping communities recover from the economic stressors of the pandemic, HAF has spurred the development of nationwide homeowner assistance infrastructure capable of meeting localized homeowner needs. 

New data on the HAF program through the end of 2023 released today serve as an example of how  President Biden’s Investing in America agenda has made significant investments in supporting existing homeowners and helped more Americans maintain housing stability.

Learning from the Great Recession

HAF’s success can partially be attributed to the lessons learned from the Treasury Department’s Hardest Hit Fund (HHF). Treasury established HHF in 2010 in the Obama-Biden Administration through the Trouble Asset Relief Program in response to the 2008 financial crisis. The Fund allocated $9.6 billion to 18 states and the District of Columbia to assist struggling homeowners during unprecedented home price declines and sustained high unemployment. Though HHF operated under a different economic and mortgage relief environment than HAF, lessons learned from its decentralized "state-based” structure and operational challenges of coordinating homeowner payments with mortgage servicers led to significant improvements in HAF. 

Some of the lessons learned from HHF that Treasury incorporated into the design and implementation of the HAF program included:

  1. ensuring that HAF programs consider homeowners most at risk of displacement in their program design and outreach strategies through the HAF plan process and data collection, 
  2. emphasizing the critical nature of human-centered design in the application process to eliminate barriers for struggling homeowners and supporting program flexibility to address the most urgent homeowners needs, and 
  3. encouraging streamlined servicer communication and coordination between HAF stakeholders to provide more timely homeowner assistance. 

State, Tribal, and territory programs varied in how they tailored these strategies to match the needs of their homeowners, resulting in innovative approaches maximizing timely distribution of HAF funds to those most in need of assistance.

Innovative Approaches

The American Rescue Plan Act required distribution of HAF award funds to a broader set of recipients than HHF, expanding the scope of federal assistance to homeowners in all 50 states as well as Tribal government and Tribally Designated Housing Entities, and territories.[1] The legislation also allowed a more comprehensive set of housing assistance options for homeowners, such as payment of utilities, property taxes and fees, prevention of homeowner displacement through home repair and title clearing, and funds to support housing counseling and legal aid. 

The increased statutory flexibility under the HAF program has allowed for a nationwide homeowner assistance infrastructure development that also resulted in tailored program designs to match localized homeowner needs. For example, states like Louisiana and Missouri solely focused on mortgage assistance, as those states determined that would make the greatest impact in their respective jurisdictions, while other states found a stronger need for covering other housing expenses. For instance, Vermont’s HAF program provided utility assistance to over half of the homeowners assisted. Some programs, like Alabama, developed specialized design elements to address the needs of owners of manufactured homes, while others, like West Virginia and many Tribal governments, determined that incorporating home repair services were important strategies to help low-income homeowners in their jurisdictions avoid displacement.

Currently, the spending on non-mortgage assistance for states, Tribal governments, and territories totals over $800 million, including: $363 million in property taxes, $208 million in utility payments, and $43 million in home repairs to maintain the habitability of the home. HAF also has enabled HAF programs to fund $45 million in housing counseling and $37 million in legal aid to set homeowners up for longer term housing stability.

The importance of considering the specific needs of homeowners most at risk of displacement has also extended to programs’ outreach activities, both in the HAF program design and implementation. Taking a lesson learned from HHF, HAF required recipients to target lower income earners and socially disadvantaged individuals as well as incorporating data-driven analysis and partnerships with trusted community partners.[2] For example, some states like Minnesota and New York built strategic partnerships with community-based organizations to support outreach and application intake activities for historically excluded and most impacted communities.

As of Q4 2023 the distribution of funds appears to be reaching critical populations to support housing stability: 54% of HAF assistance has been delivered to homeowners with incomes less than 50% of the area median income, 40% of homeowners assisted self-identified as Black, 20% self-identified as Latino, and 63% self-identified as female.[3]

The HAF program also emphasized from the beginning that streamlining the application process was essential. Treasury encouraged HAF programs to enhance these efforts by taking a human-centered design approach, which helps foster more trust with applicants through clearer and accessible communications. For instance, rather than requiring homeowners to guess what might constitute a “COVID-Impact,” many HAF programs developed COVID-19 impact checklists to help homeowners more readily identify whether they meet the eligibility criteria, which also helped to reduce the guess work and expedited the processing time for applications. 

Further, HAF programs could streamline applications through data-driven strategies. The HAF Guidance provided two methods of income verification: income documentation or fact-specific proxies for verification of income.  Strategic use of the fact specific proxies has shown some promise in easing excessive documentation burdens for applicants while simultaneously reducing the administrative burden for frontline staff to determine eligibility. For example: 

  • South Carolina discovered that employing a fact-specific zip code proxy to determine whether an applicant resides in a very low-income geographic census tract with high risks of housing instability enabled the program to more effectively serve low-income homeowners in the state. As South Carolina possesses a great number of rural areas and hard-to-reach populations, this approach was particularly beneficial in addressing the often-overlooked housing needs of low-income homeowners throughout the state. 
  • Indiana has allowed applicants who receive federal benefits such as Supplemental Nutrition Assistance Program (SNAP), Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), or Temporary Assistance to Needy Families (TANF) to provide a copy of their approval letter from one of the federal programs as a fact-specific proxy to verify their income eligibility, streamlining applicant eligibility screening processes for staff and simplifying documentation requirements for applicants. 
  • The Saginaw Chippewa Indian Tribe of Michigan is using HAF resources to prevent foreclosures and delinquencies by coordinating with a local non-profit for outreach, as well as with mortgage servicers to assist Tribal homeowners facing financial instability. The Tribe’s program includes payment assistance for first mortgages, reverse mortgages, contracts for deeds or land contracts, and loans secured by manufactured housing.

Overall, ongoing flexibility has been critical in the implementation of HAF programs. Treasury has prioritized allowing HAF programs to make swift adjustments to non-budgetary program design elements after initial implementation. This has allowed HAF programs to respond to the observed local needs of homeowners, less effective program design elements, and changing market environments. For example:

  • During the course of the HAF program, the mortgage market shifted. Higher interest rates made it more difficult for homeowners to achieve mortgage relief through refinancing or loss mitigation. New Hampshire’s HAF program loosened and then later removed a requirement that applicants had to go through the loss mitigation process before applying for HAF assistance, quickly removing a barrier that had delayed homeowners from getting needed assistance.
  • Upon reviewing their program processes, the North Carolina’s HAF program administrators determined that not requiring homeowners to sign an Assistance Agreement could speed up payment processing. The program pivoted by implementing an Award Letter process that removed the need for a signature, resulting in faster homeowner assistance. 

While program flexibility to adjust to local needs has been a critical element of HAF program design, fostering operational standardization and cooperation with mortgage servicers to maximize timely payments has been critical to the HAF implementation strategy and builds from processes first developed under HHF. HHF program administrators discovered the importance of this coordination and developed standard operations for communicating critical information about homeowners’ mortgages through the development of a Common Data File (CDF). Under the HAF program, Treasury has prioritized facilitating CDF coordination between HAF programs and mortgage servicers through frequent meetings designed to troubleshoot “real time” operational challenges in implementing these standardized processes. Broad participation in this process has fostered more timely communications, application processing, and mortgage payments. 

Future Considerations

Just as HAF learned from the successes and shortcomings of HHF, HAF has established a blueprint from which future emergency housing programs can learn and grow. Future emergency housing policy makers and program administrators may consider how they might learn from HAF to continue the trajectory of improving the timeliness and effectiveness of flexible locally designed housing programs that have a national impact:

  • While many homeowners in financial distress have benefited from non-mortgage assistance, HAF program administrators noted that these program elements can be administratively burdensome. For instance, one major challenge some of these HAF programs face is designing scalable payment processes to pay a large number of payees for qualified expenses, such as utilities (electricity, water) and Homeowner Association fees (HOAs). Future programs can consider how to best collaborate with these larger payee markets with more centralization or standardization to expedite homeowner relief.  
  • Future emergency programs might further emphasize the integration of housing counseling and outreach targeted at homeowners with limited-English proficiency and disabilities. Further identification of ways that programs might make the application process more accessible and streamlined with strategically simplified documentation requirements can enhance the timeliness and impact of future programs. 
  • Most HAF programs used the standardized processes of the CDF to communicate applicant information; however, operational inefficiencies remained. Each state and servicer often had additional policies, procedures, and requirements that each party had to remain up to date on and adjust to in real time, adding layers of complexity to the standardized process. Future programs might benefit from increased operational centralization. A standard platform for applicant information could further improve payment processing and provide administrative support to smaller entities with fewer resources. 

Further, states might consider the benefits of continuing to invest in the housing stability infrastructure developed under the HAF program. These investments would help states avoid future “startup” financial costs and time required to establish an emergency housing program. In the face of a large-scale housing crisis, existing housing programs could allocate funding to scale up their operations rather than creating a new agency. Homeowners and localities alike benefit from efficient and timely responses to a financial crisis to avoid the detrimental financial impacts of foreclosure. 


[1] Includes the District of Columbia, U.S. territories, Indian Tribes, Tribally Designated Housing Entities, and the Department of Hawaiian Home Lands.

[2] HAF programs had to ensure that 60% of their funds were used for qualified HAF expenses by homeowners with incomes below or equal to 100% of the area median income for their household size or less than 100% of the median income for the United States and that the remaining funds were prioritized to go to socially disadvantaged individuals (see 15 U.S.C § 9058d.(c)(2)). Eligible homeowners included those with incomes equal to or less than 150% of the area median income or 100% of the median income for the United States, whichever is greater. The HAF Planning process also included requirements that programs consider geographic census data and partners for community engagement as a part of program development and monitor application intake against outreach goals to ensure that populations at highest risk of displacement were reached. (See HAF Guidance, page 5 at https://home.treasury.gov/system/files/136/HAF-Guidance.pdf)

[3] Excludes omitted data or data not reported.