PA announced that it will begin accepting applications for its Homeowner’s Assistance Fund (HAF) on February 1, 2022. HAF will distribute $350 million allocated to the Commonwealth through the American Rescue Plan Act of 2021 (Pub L No. 117-2, 135 Stat. 4). The program is intended to assist homeowners experiencing hardships as a result of the Covid-19 pandemic.
Eligible homeowners may apply for mortgage assistance for their owner-occupied primary residence. In order to be eligible, homeowners must have experienced a financial hardship after January 21, 2020, even if the hardship began before that date. Household income must be at or below 150% of area median income. Priority will go to applicants with household income at or below 100% of area median and those who are defined as Socially Disadvantaged. For the purpose of the program, an individual is social disadvantaged if their ability to purchase a home has been impaired as a result of diminished access to credit. This impairment may be the result of being (1) a member of a group who has been subject to racial or ethnic prejudice or cultural bias; (2) a resident of a majority-minority Census tract; (3) an individual with limited English proficiency; (4) a resident of a U.S. territory, Indian reservation; or Hawaiian Home Loan, or (5) an individual who lives in a county that has had 20% or more of its population living in poverty over the last 30 years (a persistent poverty county).
If accepted by the program, homeowners would be eligible for up to $30,000 or 24 months in mortgage assistance. Funds can be used to reinstate a first mortgage and for up to 6 months of mortgage payments going forward. Funds will also be available to pay for delinquent property taxes, insurance premiums, HOA fees and delinquent utilities.
Lenders and Servicers should expect delays in foreclosure timelines as courts allow homeowners leeway to apply to the program. This will be particularly true in those counties that have implemented foreclosure mediation programs. We anticipate that courts may be more inclined to grant postponements of sheriff’s sales, when requested by homeowners, so that they may apply to the program. Servicers with large portfolios in Philadelphia can expect the most significant impact.
If you have any questions, please contact Stern & Eisenberg Managing Pennsylvania Attorney, Andrew Marley, Esquire, Pennsylvania Attorney, Kenya Bates, Esquire, or the Stern & Eisenberg Value Department.