Texas has launched a $842 million fund to assist homeowners facing foreclosure as a result of the COVID-19 outbreak, a year after the funds were approved by US Congress.
The programme, dubbed the Texas Homeowner Assistance Fund, is intended to assist homeowners who have struggled to pay their mortgage, property taxes, house insurance, and other home-related payments as a result of economic challenges brought on by the pandemic. This Monday, the Texas Department of Housing and Community Affairs, the state agency responsible for overseeing the programme, began accepting applications.
“We take our fellow Texans’ financial problems very seriously,” Bobby Wilkinson, executive director of the TDHCA, said in a statement.
Texas took over a year to launch the programme – significantly longer than many other states. President Joe Biden signed the American Rescue Plan Act, a $1.9 trillion economic stimulus package, into law last March, allocating more than $10 billion to assist homeowners in remaining in their homes.
According to the National Council of State Housing Agencies, twenty-five states, including California and New York, had their systems up and running prior to Texas. Ten states, among them Texas, have conducted experimental programmes. According to TDHCA, Texas has distributed approximately $5 million to more than 600 homes to assist homeowners with mortgage payments.
That money could have aided suffering homes much sooner, according to Amir Befroui, an attorney who directs the organisation Lone Star Legal Aid’s Foreclosure Prevention Project. He attributed the sluggish pace to TDHCA’s lack of urgency.
For instance, Befroui stated that the monies could have aided a client of his – an elderly woman from East Texas — in avoiding foreclosure. On her home near Longview, the woman has a reverse mortgage, which compels borrowers to maintain current insurance and property taxes. However, upon her husband’s death, she fell behind on her mortgage payments, and the lender foreclosed on her property.
“Had this money been distributed at any point in 2021, I might have been able to rescue the house,” Befroui explained.
Treasury accepted TDHCA’s plan after “extensive planning with external parties and analysis,” agency spokesperson Kristina Tirloni said.
The Treasury Department established guidelines for state-level homeowner assistance programmes in April — and TDHCA stated on its website that it intended to submit its proposal to Treasury by the end of September after soliciting public comments on the programme. Tirloni said the state’s plan was approved by the federal government in January and launched “a little more than 30 days afterwards.”
To qualify for aid, homeowners must demonstrate financial hardship caused by the pandemic. The programme will cover up to $40,000 in past-due mortgage payments — and up to $25,000 in past-due property taxes, property insurance, and association dues. According to the organisation, the scheme will benefit between 55,000 and 70,000 homes.
The new initiative reflects a change at TDHCA away from supporting renters who have been disproportionately impacted by the pandemic and toward assisting homeowners. In November, the agency ceased accepting applicants for its federally sponsored rent assistance programme, citing diminishing funds.