The American Bankers Association yesterday joined a broad coalition of housing and civil rights organizations in a letter urging lawmakers to include $25 billion in direct assistance to struggling homeowners in the next COVID-19 relief bill. The groups requested that the majority of these funds be distributed through state housing finance agencies, and that lawmakers earmark at least $100 million for housing counseling and $39.7 million for the Fair Housing Initiatives Program.
“The COVID-19 pandemic and ensuing economic crisis are devastating homeowners, particularly in communities of color which have not yet recovered from the 2008 Great Recession,” the groups noted, adding that of an estimated 3.8 million borrowers who are currently past due on their mortgages, over half are nonwhite.
The groups endorsed the creation of a Homeowner Assistance Fund, which would be modeled after the Hardest Hit Fund created after the last financial crisis. The fund would “enable state housing finance agencies to help homeowners with COVID-19 hardships, including providing direct assistance with mortgage payments, helping people get into affordable loan modifications, and assisting with utility payments, property tax and insurance payments, homeowner association dues and other support to prevent the loss of home equity, mortgage delinquency, default, foreclosure, or loss of utility services.”
The groups also called for additional funding for HUD-approved housing counseling agencies and legal assistance. “A critical lesson of the Great Recession is that the communities most impacted need targeted, early intervention,” they wrote. “Acting now to include these key provisions in the pending COVID-19 relief package will help stem what could be a damaging housing crisis in the U.S. concentrated in low-income communities and communities of color.”