New York state homeowner residents who require certain financial relief stemming from economic hardship exacerbated by the COVID-19 coronavirus pandemic will be able to ask for direct assistance through the state’s Homeowner Assistance Fund (HAF), and that includes reverse mortgage borrowers according to an announcement from members of the New York State Assembly. Applications for the state-level fund will begin being accepted on January 3, 2022.
The HAF, designed for “assisting homeowners who are at risk of default, foreclosure or displacement as result of a financial hardship” from the pandemic, is described as federally funded likely stemming from the federal HAF which was passed by Congress and signed by President Biden as a part of the American Rescue Plan Act of 2021 earlier this year.
On the federal HAF, officials with the Biden administration previously told RMD that reverse mortgage borrowers would qualify for assistance specifically as it related to the fees that reverse mortgage borrowers are required to keep up with.
“The Homeowners Assistance Fund would be a way in which to provision funds to help homeowners, including seniors with HECMs, that may have back tax or insurance payments that need to be made due to hardships related to the pandemic,” an administration official told RMD in February. “And that would be one of the measures in which seniors and the HECM portfolio can be addressed.”
The state-level fund is open specifically for reverse mortgage borrowers who are in default on a reverse mortgage, according to the dedicated website launched by Sustainable Neighborhoods LLC on behalf of New York State Homes & Community Renewal.
“Homeowners across NYS have struggled financially due to the pandemic,” said Assemblymember Anna Kelles in a statement posted on Twitter. “The NYS Homeowner Assistance Fund can help.”
This is not the only recent attention that New York state has given to reverse mortgages, as Gov. Kathy Hochul recently signed into law a bill that would allow certain qualifying co-operative residents in the state to take out proprietary, non-agency reverse mortgages on their homes.
Since the Federal Housing Administration (FHA) does not permit Home Equity Conversion Mortgages (HECMs) on co-ops, the reverse mortgage activity for such dwellings will be limited to proprietary products in New York which only a handful of lenders are licensed to originate.
Find more information about the state-level HAF at its dedicated website.