The U.S. Treasury Department has granted New York state approval to provide $539 million to residents at risk of losing their homes.
New York homeowners who declare a COVID-19-related financial hardship are protected from being foreclosed on under a state moratorium that will end Jan. 15. The funding approved Wednesday, known as the Homeowner Assistance Fund, can be used to pay mortgage, tax, insurance or homeowner's association bills as well as other housing costs.
The money was set aside by Congress in March as part of the $1.9 trillion American Rescue Plan Act, which aimed to address the public health and economic effects of the pandemic.
"As we focus on our post-pandemic economic recovery, we need to do everything in our power to help New Yorkers stay in their homes," Gov. Kathy Hochul said in a statement. "New York has been a model for getting relief to those still struggling, and I am proud that we are the first state in the nation to receive U.S. Treasury approval for the Homeowner Assistance Fund program."
Eligible homeowners include residents with a mortgage whose forbearance period is ending; residents who weren’t offered forbearance or missed their opportunity to take advantage of it; residents without a mortgage who are 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.
Ian Wilder, executive director of Long Island Housing Services, said he worries that there will be more people who need help than funds available when the foreclosure moratorium lifts in January.
"We’ve been waiting for the oncoming deluge, so we’re glad this money is coming because we’re going to need some solutions," Wilder said. "We expect everyone to be overwhelmed at a level that’s unbelievable — the courts, the banks and the nonprofits."
Long Islanders will have to meet income requirements to receive the aid. Recipients must earn less than 150% of the area median income, or $194,840 for a family of four on Long Island. Three-fifths of the funds are set aside for people earning less than the area median income, or $129,900 for a family of four on Long Island, and 40% of funds are designated for socially disadvantaged people, including Black, Hispanic, Native American and Asian homeowners.
The maximum award allowed is $50,000 and it cannot be used for more than six consecutive months’ worth of payments.
To receive the aid, which is structured as noninterest bearing, forgivable loans, applicants must have experienced financial hardship because of the pandemic, such as loss of income or an increase in living expenses, according to a state presentation.
Local housing agencies have been trained and are ready to assist with applications when they open, said Peter Elkowitz, president and CEO of the Long Island Housing Partnership. He said it's helpful that the program allows money to be spent on a variety of bills. "The more flexibility they give ... the better it is."
Long Island has the highest homeownership rate of the state’s 10 regions, at 80.6%, with nearly 755,000 homeowning households, state data shows.
The state plans to accept applications through an online portal, which will be available at hcr.ny.gov/homeowners when it opens.