Reed, Brown Seek to Create $75 Billion Housing Assistance Fund
Federal funds would help prevent potential avalanche of foreclosures in communities hit hardest by COVID-19 pandemic and economic fallout
WASHINGTON, DC – In an effort to prevent the novel coronavirus (COVID-19) pandemic from sparking a full-blown housing, eviction, and foreclosure crisis, U.S. Senators Jack Reed (D-RI) and Sherrod Brown (D-OH) are offering legislation to provide a new $75 billion Housing Assistance Fund to help households struggling to make ends meet.
The Housing Assistance Fund would build off of the success of the Hardest Hit Fund (HHF), which Senators Reed and Brown championed in 2010, and which provided funds to state housing finance agencies to provide targeted foreclosure prevention assistance to households and neighborhoods in states hit hard by the economic and housing market downturn.
The Housing Assistance Fund expands this model to provide a flexible source of federal aid to all state-level Housing Finance Agencies (HFAs) to keep people in their homes.
HFAs could use federal funding to help struggling households remain in their homes while they search for new employment or wait to get back to work. Financial assistance could go toward mortgage payment assistance; utility payments; and other support to prevent eviction, mortgage delinquency, default, or foreclosure, or loss of utility services.
The Reed-Brown bill would provide assistance to communities nationwide and includes a small state minimum, ensuring each state would receive no less than $250 million.
Senator Reed stated: “The coronavirus has made America’s affordable housing crisis worse. We need to act now to prevent an even deeper housing crisis. Too many Rhode Islanders have already lost their jobs to this pandemic, and we can’t afford for families to lose the roof over their heads too. We can’t let a wave of avoidable foreclosures wipeout families, neighborhoods, and communities just as they are overcoming the aftermath of COVID-19. The Housing Assistance Fund uses a proven model to effectively distribute funds in a manner that helps people stay in their homes. No one can say for certain how or when this pandemic will end, but we know this legislation is needed to prevent millions of Americans from becoming homeless. I will continue working to provide additional eviction prevention and foreclosure prevention for those in need.”
“At the height of this pandemic, families in Ohio and across the nation should be focused on their health and the wellbeing of their communities - not worrying about losing their home,” said Senator Brown. “The funding provided through the Housing Assistance Fund would give states the tools they need to keep people who will be most impacted by the economic fallout of this pandemic in their homes in the months ahead.”
The bill is being cosponsored by all Democratic members of the Senate Banking Committee, including Senators Jon Tester (D-MT), Brian Schatz (D-HI), Doug Jones (D-AL), Tina Smith (D-MN), Elizabeth Warren (D-MA), Kyrsten Sinema (D-AZ), Mark Warner (D-VA), Bob Menendez (D-NJ), Chris Van Hollen (D-MD), and Catherine Cortez Masto (D-NV).
“Nobody can say when the emergency health restrictions will lift, but we commend Senator Reed for focusing on solutions to prevent thousands of Rhode Islanders from ending up on the street. There are a lot of renters and homeowners already at risk of not being able to afford their rent or mortgage, and the Reed-Brown bill would be a critical lifeline to help responsible people stay in their homes and bolster whole neighborhoods,” said Carol Ventura, Executive Director of RIHousing. “During the last economic recession, RIHousing was able to utilize the Hardest Hit program to help almost 6,000 families keep their homes. Housing Finance agencies are ready to swiftly deploy these critical funds to help families weather the storm created by the COVID-19 health crisis in Rhode Island and across the country. We thank Senators Reed and Brown for their leadership and support of struggling families.”
“Habitat for Humanity applauds Senators Reed and Brown for their legislation to authorize the Housing Assistance Fund,” said Chris Vincent, Vice President of Government Relations and Advocacy for Habitat for Humanity International. “The economic fallout of the COVID-19 pandemic means millions of families who have lost income are now facing impossible choices between making housing payments and providing life’s other essentials. The Housing Assistance Fund will help homeowners and renters stay in their homes. We urge Congress to include this legislation in any upcoming COVID-19 economic relief package.”
The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020 included $4 billion for homeless assistance funding to help vulnerable populations avoid evictions and minimize the immediate impacts of lost employment, child care, or other unforeseen circumstances related to COVID-19. The CARES Act also grants forbearance and protection against foreclosure to borrowers with loans insured or guaranteed by FHA, VA, or USDA or backed by Fannie Mae and Freddie Mac. The Housing Assistance Fund will ensure that families can remain in their homes long term.
The COVID-19 pandemic is already slowing down and disrupting the U.S. housing market. And in spite of interest rates being historically low, the volume of mortgage applications for loans used to purchase homes was down 24 percent compared with a year ago for the week ending March 27, according to data from the Mortgage Bankers Association.
The Senators plan to introduce the legislation as soon as the U.S. Senate returns to session.