HUD Issues Reminder to Servicers About Homeowner Assistance Fund

HUD recently issued a reminder to servicers about the availability of the Homeowner Assistance Fund (HAF) through which eligible, distressed borrowers can receive financial assistance to cover qualified housing-related expenses.  Servicers are required to inform distressed homeowners of the availability of funds through their jurisdiction’s HAF.

The HAF was established by the American Rescue Plan Act of 2021 and is available to distressed borrowers with FHA-insured single family forward mortgages and Home Equity Conversion Mortgages (HECM).  HAF programs may be used to bring the homeowner’s mortgage current; reduce the balance or pay off the homeowner’s outstanding loss mitigation Partial Claim, even if the homeowner’s mortgage payments are now current; or pay for delinquent property tax and homeowner’s insurance charges on defaulted HECMs.  Further, HAF programs may be used in combination with certain FHA loss mitigation options for single family forward mortgages or with the Covid-19 HECM Property Charge Repayment Plan.

HUD also reminds servicers that the FHA definition of imminent default was expanded to include homeowners who qualified for HAF, which enables servicers to offer additional loss mitigation options to homeowners who qualified for or used HAF funds and who are no longer delinquent but require further assistance to avoid redefault.