Leading Homeownership Nonprofit Applauds Congressional Leadership and Biden Administration for Passing Critical Bill, Details How It Can Help New York Homeowners

Statement from Christie Peale, CEO and Executive Director of the Center for NYC Neighborhoods

We applaud the Biden Administration and Congress for passing the American Rescue Plan, a substantial $1.9 trillion relief bill to help families across the country recover from the devastating effects of the COVID-19 pandemic. 

The American Rescue Plan includes badly needed aid for homeowners, including $9.96 billion for a Homeowner Assistance Fund, $100 million for housing counseling, and $20 million for Fair Housing Initiatives. We especially want to thank Congressional leadership for championing the needs of struggling homeowners as part of this relief package, including Senate Majority Leader Chuck Schumer and the other members of the New York congressional delegation who voted for the American Rescue Plan. 

Homeownership is something millions of Americans work hard to achieve and maintain. Amid the COVID-19 pandemic, homes have come to mean so much more as they became makeshift offices, schools, and workspaces. But millions of Americans, including Black and Brown families disproportionately suffering due to the pandemic, are currently unable to pay for their housing costs and are on the brink of foreclosure. New York State especially needs this assistance, with 8% of New Yorkers behind on their mortgage, nearly as high as the delinquency rate at the peak of the Great Recession. 

The $9.96 billion Homeowner Assistance Fund will provide a critical safety net for homeowners who are behind on their mortgage or other housing payments. Under this program, funds will be allocated by the U.S. Treasury to New York State, so that New York State may provide homeowners with direct assistance to avoid the loss of their homes. Funds may be used to reinstate a mortgage, facilitate a reduction in mortgage payments, or pay for other costs that threaten stable homeownership such as delinquent taxes, insurance, utilities, association fees or common charges. Aid will be prioritized for the hardest hit homeowners, including those below the area median income or who are socially disadvantaged.

These homeowner assistance dollars should be provided by the U.S. Treasury to New York State within 45 days. The time is now to put programs in place in New York so they are ready to meet an influx of homeowner needs when federal and state moratoria and forbearance plans expire in the coming months. Programs should be guided by the following principles:

  • Funds should be used to help the hardest hit homeowners, including low- to moderate-income homeowners and homeowners of color who are disproportionately impacted by the pandemic. Approximately one in five Black and Hispanic borrowers are not current on their mortgage payments. In New York City alone, over 20,000 Black homeowners lost their homes during the Great Recession. The Homeowner Assistance Fund can and must prevent additional losses these same communities face due to the current health crisis. Delivering effective relief to homeowners will not only preserve a generation of wealth but bolster efforts to remediate the racial wealth and homeownership gaps produced by a legacy of unjust housing policies. 
  • Funds must be easy to access for the neediest families, including streamlined application processes that are designed to meet families where they are. Programs must facilitate access by vulnerable households, not pose undue documentation burdens or lock out families with excessively strict eligibility rules.
  • Successful programs will integrate existing not-for-profit resources, including housing counselors, legal services providers, and community development financial institutions who understand community needs and are best positioned to connect relief programs to populations that need aid. 

These are tried and true approaches that we have learned through the crises of the past, after helping thousands of families avert foreclosure through the New York State Mortgage Assistance Program (NYS-MAP). NYS-MAP, administered by the Center through its subsidiary, Sustainable Neighborhoods LLC, disbursed $100 million in direct mortgage assistance to families before funding was exhausted in 2019. If New York State delivers Homeowner Assistance Fund dollars efficiently, and supports the Homeowner Protection Program, it will be better positioned to prevent another foreclosure crisis before it begins.