Las Vegas, Nev. – In an effort to prevent the COVID-19 pandemic from sparking a full-blown housing, eviction, and foreclosure crisis, U.S. Senator Catherine Cortez Masto (D-Nev.) will cosponsor legislation unveiled by Senators Sherrod Brown (D-Ohio) and Jack Reed (D-R.I.) to provide a new $75 billion Housing Assistance Fund to help households struggling to make ends meet.
“As Nevada’s Attorney General during the 2008 financial crisis, I saw how the lives of hardworking Nevadans were turned upside down by rampant foreclosures. I want to ensure that homeowners impacted by COVID-19 don’t need to worry about keeping a roof over their heads in the midst and in the aftermath of this pandemic,” said Senator Cortez Masto. “This legislation would bring much-needed housing assistance to the Silver State, and I look forward to its introduction in the United States Senate.”
The Housing Assistance Fund would build on the success of the Hardest Hit Fund (HHF), which provided funds to state housing finance agencies to provide targeted foreclosure prevention assistance to households and neighborhoods in states hit hard by the economic and housing market downturn. The Housing Assistance Fund expands this model to provide a flexible source of federal aid to all state-level Housing Finance Agencies (HFAs) to keep people in their homes.
HFAs could use federal funding to help struggling households remain in their homes while they search for new employment or wait to get back to work. Financial assistance could go toward mortgage payment assistance; utility payments; and other support to prevent eviction, mortgage delinquency, default, or foreclosure, or loss of utility services. The Reed-Brown bill would assist communities nationwide and includes a small state minimum, ensuring each state would receive no less than $250 million.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020 included $4 billion for homeless assistance funding to help vulnerable populations avoid evictions and minimize the immediate impacts of lost employment, childcare, or other unforeseen circumstances related to COVID-19. The CARES Act also grants forbearance and protection against foreclosure to borrowers with loans insured or guaranteed by FHA, VA, USDA or the Section 184 Indian Home Loan Guarantee Program or backed by Fannie Mae and Freddie Mac. The Housing Assistance Fund will ensure that families can remain in their homes long term.
The COVID-19 pandemic is already slowing down and disrupting the U.S. housing market. In spite of interest rates being historically low, the volume of mortgage applications for loans used to purchase homes was down 24 percent compared with a year ago for the week ending March 27, according to data from the Mortgage Bankers Association.
Senators Brown and Reed plan to introduce their legislation as soon as the U.S. Senate returns to session.