Treasury’s Homeowner Assistance Fund, passed as part of the American Rescue Plan, has reached more underserved communities than prior federal mortgage assistance and foreclosure prevention programs
WASHINGTON – The U.S. Department of the Treasury today released Homeowner Assistance Fund (HAF) data through March 31, 2023, which demonstrates a substantial increase in assistance to homeowners. As of March 31, HAF programs made roughly $3.7 billion in payments to more than 318,000 homeowners at risk of foreclosure. In the first quarter of 2023 alone, HAF programs distributed $1.2 billion in assistance to households – a 50 percent increase over the fourth quarter of 2022 – demonstrating the program is continuing to scale rapidly as designed. Additionally, 14 states and two U.S. territories have expended over 50 percent of their HAF program funds, excluding administrative expenses.
The data also shows HAF programs are reaching a higher proportion of economically vulnerable and traditionally underserved homeowners than previous federal mortgage assistance efforts. As of March 2023, 49 percent of HAF assistance was delivered to very low-income homeowners, defined as homeowners earning less than 50 percent of the area median income. Demographically, 35 percent of homeowners assisted self-identified as Black, 23 percent self-identified as Hispanic/Latino, and 59 percent self-identified as female.
“The Homeowner Assistance Fund has helped keep hundreds of thousands of families in their homes,” said 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.”
In leading HAF’s implementation, the Treasury Department has also helped states and localities find new ways to connect to historically underserved populations, including setting up programs that include culturally and linguistically relevant outreach, adjusting operations to reduce unduly burdensome application requirements, ensuring flexibilities to meet evolving local needs, and streamlining communication with servicers to get mortgage assistance to borrowers with minimal delays. These efforts have combined with a strong push for jurisdictions to invest in housing stability services that provide wrap-around support to keep families in their homes. The Treasury Department continues to work with HAF programs to adjust their plans and operations to best serve homeowners in their states.
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 percent of the homeowners assisted were socially disadvantaged and 96 percent 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 townhalls 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.
HAF is a key component of the Biden-Harris 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. The combination of these programs has resulted in historically low foreclosure filings; according to Black Knight data, May foreclosure starts were about 35 percent below pre-pandemic levels.