January 25, 2022
Many residents across New Jersey and Pennsylvania are still struggling to recover from the impacts of the COVID-19 pandemic. In an effort to aid homeowners, both states have recently announced the launch of programs that will provide mortgage assistance to those in need.
With funding provided from the American Rescue plan and the U.S. Department of Treasury's Homeowner Assistance Fund, the programs will help to cover mortgage arrearages, delinquent property taxes, and other housing costs.
A federal foreclosure moratorium was put into place at the beginning of the pandemic, which covered a majority of the nations home loans. However, that program ended in July 2021 and foreclosure rates soon began to pick up in communities across the region.
The lack of formal protections for homeowners still struggling to recover financially from the impacts of COVID-19 meant that many people were unequipped with the financial stability to make housing-related payments on time.
Targeting those most at-risk by providing this additional assistance is important, especially given the increase in need for homeowners across both states.
In October 2021, ATTOM — a licensor of the country's largest collection or foreclosure and mortgage data — released a report that showed New Jersey was among the states with the highest foreclosure rates.
Pennsylvania and New Jersey both saw an uptick in the start of foreclosure proceedings that month, with 107% and 61% increases, respectively. Repossessions of properties by mortgage lenders also increased, with 175 in Pennsylvania — 72 of which were in Philadelphia.
To be eligible for assistance in New Jersey, homeowners must own and occupy a primary residence and have demonstrated financial hardship that began on or after Jan. 20, 2020.
In terms of financial eligibility, homeowners in New Jersey must have a household income at or below the area median income in their county. The New Jersey Housing and Mortgage Finance Agency has a tool to help homeowners determine the AMI for their county based on household size.
"Working families have faced unprecedented burdens over the last two years," said New Jersey Lt. Gov. Sheila Oliver. "If you are struggling to pay your mortgage or other homeowner-associated obligations, the ERMA program can help you get back on your feet."
Applications for New Jersey's emergency relief mortgage assistance program will open on Feb. 8. Officials say that those looking to check individual eligibility can call the New Jersey Hardest Hit Fund and receive support.
Homeowners can also find financial counseling related to homeownership and foreclosure relief through the Housing and Mortgage Finance Agency. Counselors can assist homeowners in finding options for mortgage relief – even if a household is ineligible for the assistance program.
"Thousands of hardworking New Jersey families are struggling to keep a roof over their head and this program will provide the necessary lifeline to avoid foreclosure and keep them in their homes," said U.S. Senator Bob Menendez.
"Homeownership is critical to stabilizing neighborhoods and building strong communities, and I am proud to have worked on securing this vital funding through the American Rescue Plan for New Jersey families," he added.
New Jersey's funding will be not be distributed to homeowners, but rather directly to the servicer of the mortgage loan or other agencies.
Like New Jersey, Pennsylvania's assistance fund requires homeowners to own and occupy a primary residence, and to have experienced demonstrated financial hardship beginning on or after Jan. 21, 2020. Homeowners must have a household income at or below the AMI for each individual county.
The Homeowner Assistance Fund uses a searchable tool to help those who are interested in finding the median income by county.
However, Pennsylvania has additional eligibility requirements, including those about the type of mortgage loan a homeowner has. The state's homeowner assistance is only available to those whose first mortgage is a conforming loan, meaning that it conforms to certain loan limits provided by servicers like Fannie Mae.
Pennsylvania homeowners also cannot receive mortgage assistance from another governmental source in order to receive assistance through the state's mortgage relief fund.
"As we continue to advance our COVID-19 recovery efforts, we must address the rising number of homeowners facing possible loss of their homes and foreclosure — this program will do just that," said Gov. Tom Wolf. "The Homeowner Assistance Fund will prioritize individuals with the greatest need, as well as those who are socially disadvantaged."
Applications for Pennsylvania's Homeowner Assistance Program will open on Feb 1. Officials say that homeowners can contact the Pennsylvania Homeowner Assistance Fund to find out more information and determine individual eligibility.
Funds will be distributed directly to mortgage servicers, utility operators, and authorized third parties but not to homeowners.