A Washington, D.C. organization is making strides toward helping reverse mortgage borrowers facing foreclosure risk with a new solution available to area loan holders.
The Reverse Mortgage Insurance & Tax Payment Program (ReMIT), launched this week by the District of Columbia Housing Finance Agency (DCHFA), is a $500,000 fund that will provide up to $25,000 in one-time financial assistance to qualified homeowners in the District of Columbia. Those qualifying borrowers must be at the risk of foreclosure due to delinquent property taxes, homeowner’s insurance, and qualifying property related expenses.
The program stemmed from District residents – comprising both reverse mortgage borrowers and family members – submitting complaints to the local government, namely in the form of people who had fallen behind on their property taxes. Recent changes to the District’s property tax structure compounded the issues of those on a fixed income, said Yolanda McCutchen, the Director of Public Relations for DCHFA.
“D.C. has been undergoing a renaissance of sorts, in that the home values have grown very quickly within the last 10-20 years,” McCutchen explained in a phone call with RMD. “People who are retirees have seen their property taxes get a lot higher than they previously were. But, of course if you’re on a fixed income, then your income hasn’t changed.”
According to a 2018 report on taxes in the District of Columbia by the D.C. Fiscal Policy Institute, “an assessment increase cap was designed to protect homeowners from rising property tax bills as either a result of [a] transition to annual assessments in the early 2000s, or a result of rising home values.” Regional property taxes in the District are generally lower than other surrounding areas, but the rise in home values have correlated to a steady rise in residential property taxes.
This led to a noticeable spike in reporting from seniors with delinquent property taxes and homeowner’s insurance, McCutchen said. Those reports were then submitted to the Housing Committee of the Council of the District of Columbia.
“We are doing everything we can to support residents who are struggling to keep their homes, and ReMIT, which I secured funding for in the [District’s] FY19 Budget Support Act, is our latest tool,” said Anita Bonds, District of Columbia councilmember-at-large and chairperson for the Committee on Housing and Neighborhood Revitalization in a press release announcing the program. “I am so grateful to HFA for getting this program off the ground and look forward to hearing the many testimonies that we know are to come.“
Qualified applicants must meet a specific set of criteria, including residence in the District, being secured by a reverse mortgage in the borrower’s name, the subject property must be the primary residence (and located in the District), and an annual income that cannot exceed $77,540 (though this is subject to change). The subject property must also be “at risk” of foreclosure due to unpaid property taxes/homeowner’s insurance, and a potential beneficiary must demonstrate the ability to sustain future tax and insurance payments.
Those specific qualifications are key in determining how many potential beneficiaries the program will serve, McCutchen said.
“We do know that the numbers [of potential beneficiaries] are in the hundreds in terms of people that are in default,” she told RMD. “We don’t know if all those people would meet the qualifications, however.”
The program seeks to specifically help District residents who are at risk of losing their homes, according to DCHFA Executive Director and CEO Todd A. Lee.
”With ReMIT, we aim to prevent and reduce the number of foreclosures that are happening in D.C. as a result of delinquent tax and insurance payments. ReMIT, along with the Agency’s other foreclosure prevention program, HomeSaver, will allow residents to continue living in their homes that they have worked hard to maintain,” said Lee in the announcement release.