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Application for foreclosure-prevention funds to open Jan. 3

Officials are working with groups around the state

Officials are working with groups around the state to publicize the program and help homeowners apply.  Credit: Newsday/John Keating

New York State will begin accepting applications Jan. 3 from residents at risk of losing their homes because of financial hardships caused by COVID-19, Gov. Kathy Hochul said Monday.

The state plans to distribute $539 million in federal aid as part of the Homeowner Assistance Fund. The money can be used for mortgage, tax, insurance or homeowner’s association bills, among other housing costs.

The state has blocked lenders from starting foreclosure proceedings through a moratorium that will be lifted Jan. 15. Hochul said she is hopeful the funding will help thousands of families stay in their homes. The state had previously made $2.4 billion in funds available for renters and landlords through the Emergency Rental Assistance program.

"Many New Yorkers are still recovering from the pandemic, and just like we did for renters, our state is now leading the way to provide much-needed economic relief to vulnerable homeowners across the state," Hochul said in a statement.

Applications will be available at nyhomeownerfund.org for a minimum of 30 days after entries open. The maximum award is $50,000 and payments will be structured as non-interest-bearing, forgivable loans.

But Hochul acknowledged during a press conference Monday that the funds will not be sufficient to meet demand. If requests exceed the total amount of funding, the state will process applications on a first-come, first-served basis. The state could request additional funding, as it has done for the rental aid program, asking for $996 million more from the federal government.

"Did the federal government give us enough money to take care of every single homeowner in the state of New York? No, they did not," she said. "It is not the complete answer to the crisis. That is alarming to all of us as well, but we can only work with what we receive from the federal government."

Who is eligible?

The state has designated five categories of eligible applicants: Residents behind or in a forbearance period on their mortgage; residents in default on a reverse mortgage; residents behind on property tax, water or insurance payments; residents in co-ops or condos who are behind on homeowner’s association or maintenance fees; and residents who live in manufactured home communities who are behind on home loans.

The funding is restricted to applicants earning less than 150% of area median income, or $194,840 for a family of four on Long Island. The state also must reserve 60% of funds for families earning less than area median income, which is $129,900 for a family of four on Long Island. Of the total, 40% must go to socially disadvantaged people, including Black, Hispanic, Native American and Asian homeowners.

Hochul said priority will be given to homeowners who are already in litigation because they are most at risk of losing their homes. The state is working with 70 organizations to spread the word about the program, and the state's website includes tips for filling out applications.

State Sen. Brian Kavanagh, who represents parts of Lower Manhattan and Brooklyn, said the funds addressed a gap in previous efforts to help renters. "That gap has been not having financial relief for homeowners," said Kavanagh, who chairs the State Senate’s housing committee.

The funds are an important part of protecting local economies around the state, said RuthAnne Visnauskas, commissioner of the state Homes and Community Renewal agency.

"It is critical that we preempt a cascade of defaults, foreclosures, and displacement, that would undermine the stability of our communities, devastate the property tax base, and leave local economies reeling," she said in a statement.

Clarification: An earlier version of this story contained incomplete information about the eligibility status of residents behind on property tax, water or insurance payments.

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