Earlier this year, President Joe Biden signed the American Rescue Plan Act of 2021 into law. This law created a Homeowner Assistance Fund to provide $10 billion to the states to help struggling homeowners catch up on mortgage payments, utility costs, past-due property taxes, and other housing-related expenses. On November 18, 2021, New York became the first state to get U.S. Treasury approval for Homeowner Assistance Fund aid.
Around $539 million will be distributed to homeowners in New York facing foreclosure or displacement. According to an announcement by the governor's office, "In advance of this approval, we have been preparing an implementation plan to swiftly assist low- and moderate-income, socially disadvantaged homeowners, and we will soon unveil a statewide outreach campaign to provide critical information to at-risk homeowners so they are ready to apply as soon as the application window opens." To find out more about homeowner-relief programs created under this funding in New York, read Governor's Kathy Hochul's announcement and, once the programs become available, you can learn more by visiting the New York State Housing Finance Agency's website.
Unfortunately, the funding only covers approximately 9% of the defaulted mortgage payments in New York. Homeowners in the state have collectively fallen around $5.85 billion behind in mortgage payments since the start of the pandemic. On the upside, though, this relief is in addition to a statewide foreclosure moratorium and COVID-19 forbearances for homeowners with federally backed mortgage loans. The statewide foreclosure moratorium and an eviction moratorium are in place until January 15, 2022. Homeowners facing hardships due to the coronavirus pandemic can get relief from an impending foreclosure by filing a hardship declaration with the mortgage lender, court, foreclosing party, or its agent, as appropriate. And for most federally backed mortgage loans, the option to get a forbearance will last until the pandemic ends.
Effective date: November 18, 2021