|In the near future I plan to introduce legislation to amend the CARES Act funded Mortgage and Rental Assistance Program, as established in Act 24 of 2020. After two months of operation it has become clear that immediate changes are necessary to guarantee that households experiencing a financial hardship resulting from COVID-19, are able to access the $175 million in mortgage and rental assistance approved by the legislature.
Following passage of Act 24, the Pennsylvania Housing Finance Agency (PHFA) created and deployed two brand new programs in the matter of a few weeks. While application volume has been steady, feedback from PHFA and its partner organizations indicates that a few adjustments to the legislation would reduce barriers to participation and allow a more effective utilization of these critical resources.
To that end, my legislation will include the following changes:
- Increasing maximum assistance caps by linking them to widely established industry standards rather than the current caps which do not reflect the Commonwealth’s diverse housing markets.
- 130% of the current HUD Fair Market Rent for a 2-bedroom unit in the applicable county.
- Median monthly owner costs as determined by the U.S. Census Bureau’s most recent American Community Survey, rounded to the closest $100.
- Eliminate the requirement that households be at least 30 days in arrears for eligibility, thus removing the penalty for households who have prioritized housing payments over other health and safety expenses.
- Extend the current application deadline through October 31st to accommodate applications arriving in response to the other changes enumerated in this memo.
- Remove the requirement that landlords and mortgagees waive their rights to remaining rent or mortgage obligation upon acceptance of CARES funding with the option to waive or participate in an alternative remedy.
- Landlords and tenants would be allowed to enter into repayment agreements.
- Mortgagees would assess borrowers’ eligibility under alternative loss mitigation programs where available based on the type of mortgage product.
- In cases where the landlord or mortgagee agrees to waive the remaining balance, they would be entitled to a small financial incentive above the maximum assistance so long as it does not exceed the total monthly rent or mortgage obligation.
- Permit the use of a small portion of the allocated funds to cover costs associated with administering the programs. Administrative expenses could not exceed the lesser of 5% of the allocation or the actual expenses incurred.
Now more than ever we need to make sure that families receive the support necessary to address their housing needs and give them time to regain financial stability.