This article is adapted from our Rent Update newsletter. You can sign up here to get it or fill out the form at the bottom of this post.
While renters and landlords are finally able to seek funds from the state’s Emergency Rental Assistance Program, New York homeowners have been waiting more than a year for government relief for their mortgages and expenses.
Last week, New York State announced a plan to use more than $540 million of federal relief funds to help homeowners at risk of foreclosure due to the pandemic.
The federal funds given to New York for homeowner relief are less than a quarter of the $2.4 billion earmarked for rent relief.
Some advocates worry the money will only be a drop in the bucket for owners who have tapped into savings and gone into debt to hold onto their homes. And it looks like the application process won’t begin until September — after the pandemic-spurred foreclosure moratorium is due to expire Aug. 31.
The Department for Homes and Community Renewal, the state agency administering the program, wants to hear from you. If you have any comments or thoughts on what you’d need from a homeowner relief program, email HAF@nyshcr.org no later than 3 p.m. on Friday, July 2.
But before you fire off that email, here’s what you need to know about the proposed homeowner relief program.
There is a big need, but exactly how big is unclear
There are nearly four million owner-occupied homes in the state, including more than a million in the city. But real-time data on how homeowners have been affected by the pandemic is hard to come by because mortgage bill collectors and tax collecting agencies are so decentralized.
A couple recent studies, however, offer some clues. And if THE CITY’s Open Newsroom’s inbox is any indication, a lot of homeowners are hurting.
About 75,000 homeowners in the city are at risk of foreclosure in the coming year, according to a recent analysis by the Center for New York City Neighborhoods.
A separate analysis from HCR found nearly 135,000 homeowners across the state could be at risk of foreclosure this year.
Yangchen Chadotsang, homeownership program manager at Chhaya CDC in Queens, said that any estimates of how many New Yorkers are at risk of foreclosure are probably low. That’s because the figures don’t account for the homeowners who borrowed from friends and family or drained their retirement or savings accounts to cover their costs.
While some owners went into forbearance during the pandemic, pushing back their mortgage payments for an agreed period, that time is now expiring — leaving some facing potential balloon payments for everything owed.
“The forbearance plan was a huge resource to help a lot of homeowners get through the pandemic, but the focus now is what happens after the forbearance,” Chadotsang said.
In addition to grappling with mortgage distress, some homeowners are behind on property tax payments, water bills, repairs and other expenses.
Who’s eligible for homeowner relief
Homeowners who earn less than the area median income, which is $107,400 for a family of three, are eligible for aid.
So are homeowners who earn less than 150% of the area median income and meet the federal government’s definition of “socially disadvantaged,” which includes “those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.” Any nonwhite homeowners would fall into this definition of “socially disadvantaged.”
To qualify for the relief funds, homeowners will also have to demonstrate some kind of financial hardship, such as a loss of income or added expense caused by the pandemic.
In addition, anyone planning to seek the aid must currently live in the home they own as their primary residence. The residences can be a single family home, a condo, a co-op, a mobile home, or a two- to four-family home.
Owners will need to provide certain documentation that has not been detailed yet.
You can check out all the details about the proposed eligibility requirements here.
There are three different options within the new program
The first option is for homeowners with a mortgage who are exiting forbearance and homeowners who didn’t go into forbearance and are behind on their mortgage payments. Relief is available in the form of a five-year forgivable loan for the amount of money needed to modify your mortgage in a way that you can better afford going forward, or for the amount of money needed to pay back mortgage arrears. Homeowners can get up to $50,000.
The second option is for homeowners who don’t have a mortgage but are behind on property taxes, water bills, insurance or condo or co-op fees. The relief is a five-year forgivable loan for the amount of debt owed, capped at $50,000.
The third option is in addition to one of the first two options, for owners who are unemployed or unable to keep up with housing costs. To qualify for the third option, homeowners had to be making less than 80% of the area median income before the pandemic. If you qualify for this third option, you could get up to six months of future housing payments to stay afloat as the economy recovers. These six payments are added on top of the other relief and will be funded through a different pot of federal money called Community Development Block Grants.
You can read the full plan proposal or a summary here.
When to expect the relief
The Department of Homes and Community Renewal released its plan for the homeowner relief program on June 15, and the public comment period is open until July 2. (Remember: If you have any comments or thoughts to share on what you’d need from a homeowner relief program, email HAF@nyshcr.org no later than 3 p.m. on Friday, July 2.)
New York has to submit its plan to the federal government by June 30 for approval. But that date may be extended because the federal government may offer additional guidelines for states to follow.
Then, in July and August, the state will prepare for the program’s launch, creating a hotline and an online application.
The application portal will open in early September at the earliest, according to the Department of Homes and Community Renewal. You will be able to apply online or over the phone with a housing counselor.
But isn’t that after the eviction and foreclosure moratorium expires?
Yes. New York’s eviction and foreclosure moratorium expires Aug. 31, so technically homeowners could be vulnerable to foreclosure before this relief fund even opens up.
Rene Arlain, a housing counselor at Cypress Hills LDC, said: “The projected month for the launching is some time in September, which is nuts because there is a pressing date for the end of the moratorium.”
As far as the timeline, a spokesperson from HCR said the agency has been “in close communications” with mortgage bill collectors and tax agencies and believes it “will have their cooperation in utilizing these funds to prevent foreclosures and stabilize the economic circumstances of homeowners across New York.”
Arlain was also adamant about keeping the application process simple and accessible.
He said he’s worried that if the process is too complicated, homeowners most in need will miss out on the money. These concerns have been echoed by advocates who’ve dealt with the first round of rent relief, the new rent relief program and a state relief fund for undocumented workers.
Annetta Seecharran, executive director of Chhaya CDC, said: “People are in dire, dire need of relief. This city has a lot of small homeowners whose income level is the same as renters and work in the same places as renters. Even if they meet all of the requirements, this money will run out.”
She said the potential foreclosure crisis spurred by the pandemic is bigger than this program has the capacity to remedy.
“This is a little Band-Aid, and it’s not going to fully stop the bleeding,” she said.
A spokesperson from HCR said the agency will create a framework outlining which applicants to prioritize “if demand exceeds available resources.”
Again here’s how you can weigh in
Email HAF@nyshcr.org by 3 p.m. on July 2.
How to get help before you apply
You can call the state’s homeowner helpline and get connected with a housing counselor who can help you prepare to apply at 646-786-0888.
What we’re reading
- The New York Times looked at the potential eviction crisis facing mobile home owners.
- City Limits reported on a recent City Council decision requiring the city to show the expected racial impact of some development projects before they’re approved.
City Limits also revealed that the city’s office that investigates housing discrimination is severely understaffed.
