Biden Administration Extends Mortgage Relief & Backs Reed’s $10B Homeowner Assistance Fund
WASHINGTON, DC – With a federal foreclosure moratorium set to expire next month and millions of families struggling to stay in their homes due to financial hardships caused by the COVID-19 crisis, U.S. Senator Jack Reed (D-RI), a senior member of the Senate Committee on Banking, Housing, and Urban Affairs, today heralded the Biden Administration’s decision to extend mortgage relief and a moratorium on home foreclosures for federally guaranteed mortgages through June.
The White House also endorsed Senator Reed’s Homeowner Assistance Fund. Senator Reed is the lead architect of a $10 billion proposal to help protect struggling homeowners and communities by preventing avoidable foreclosures and utility and Internet shut offs.
“Today, President Biden provided a major dose of comfort and certainty that will help keep more Americans safely housed amidst the pandemic. A safe place to call home is one of the most effective forms of PPE. We can’t allow COVID-19 to create a tidal wave of homelessness that financially wipes out families, neighborhoods, and communities. Extending mortgage relief and a moratorium on home foreclosures is a prudent step. And Congress must provide targeted relief to keep more people safely housed by preventing avoidable foreclosures,” said Reed. “My Homeowner Assistance Fund currently making its way through the budget process could help deliver much needed housing stability for many Americans. It uses a proven, tested model to effectively distribute funds in a manner that helps people stay in their homes and gives states the opportunity to tailor solutions to local needs. We learned important lessons from the last housing crisis. We need a proactive, coordinated strategy and cost-effective solutions at the state and federal level to effectively respond to this pandemic-housing threat. If we invest wisely now, we can head off a much longer, deeper, and more expensive housing crisis and hasten recovery.”
A memo from the White House today endorsed Reed’s concept for the Homeowner Assistance Fund, which he crafted along with U.S. Senators Sherrod Brown (D-OH) and Patrick Leahy (D-VT). The Homeowner Assistance Fund would build on the success of the Hardest Hit Fund, championed by Senator Reed in 2010, which provided funds to state housing finance agencies to direct targeted foreclosure prevention assistance to households and neighborhoods in states hit hard by the economic and housing market downturn.
The White House memo stated: “To bolster these efforts, it is critical that Congress pass the American Rescue Plan to deliver more aid to struggling homeowners. The rescue plan creates a Homeowners Assistance Fund which will provide states with $10 billion to help struggling homeowners catch up on their mortgage payments and utility costs. This relief is critical for homeowners with mortgages in the private market who are not able to take advantage of today’s actions and may face longer term challenges.”
According to the Biden Administration, over 10 million homeowners are behind on mortgage payments. The new joint effort by the U.S. Department of Agriculture (USDA), U.S. Department of Housing and Urban Development (HUD), and U.S. Department of Veterans Affairs (VA) will help extend the availability of forbearance options for millions of Americans with government-backed mortgages. The White House also called on Congress to take action by passing the $1.9 trillion American Rescue Package to deliver critical relief for homeowners with mortgages in the private market who are not covered by today’s announcement.