Bill Morris in COVID-19 on December 9, 2021
New York homeowners — including co-op shareholders and condo-unit owners — who have suffered economic hardship during the coronavirus pandemic just received an early Christmas present. The federal government has released $539 million in long-awaited aid to homeowners who have fallen behind on their mortgages, monthly charges, taxes, utilities and other housing costs. The money will become available after Jan. 3, 2022, and it will be doled out on a first-come, first-served basis.
“This is a great benefit for co-ops and condos,” says Michael Reilly, a partner at the law firm Norris McLaughlin who personally represents 18 affordable Mitchell-Lama co-ops in New York City. “It’s the first direct legislation designed to help homeowners stay in their homes. It’s free money — that’s the joy of this.” If the home remains the grant recipient’s primary residence for five years, the grant is forgiven.
Reilly is advising his clients to get busy right now, before the Jan. 3 opening of the initial application period, which is expected to run for 45 days. The first step is for property managers and residents to read the 15-page Policy Manual put out by the state’s Homeowner Assistance Fund, which is administering the program. The eligibility requirements and necessary documentation are spelled out in the manual.
“Property managers may have to fill out the application with shareholders and unit-owners,” Reilly says. “It must include proof that the resident is in arrears, plus proof of identity, income and economic hardship.” Eligible applicants must have household incomes at or below 100% of the deemed “Area Median Income” and must be at least 30 days delinquent on monthly housing payments for their primary residence. Funding will be capped at $50,000 per household.
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The Policy Manual defines a Qualified Financial Hardship as “a material reduction in income or material increase in living expenses associated with the Coronavirus pandemic that has created or increased the risk of mortgage delinquency, mortgage default, foreclosure, loss of utilities or home energy services, or displacement for a homeowner.”
Reilly stresses the importance of acting promptly. “By preparing their applications before the opening of the portal, residents will have a better chance of an early submission — before funding possibly runs out,” he says. “As this is a statewide program that covers single-family properties, condominiums, cooperatives, townhomes, two- to four-family properties and manufactured homes, there is strong likelihood that the funds could be committed quickly.” He adds that another factor will soon come into play: “With the eviction moratorium set to expire in mid-January, this is the perfect time to encourage applications.”
A sense of urgency comes through on the Homeowner Assistance Fund website, which states: “HAF expects to receive significantly more applications than can be funded by the program. Applications will be processed in the order they were received.”
Millions of renters are already acquainted with such relief. The Emergency Rental Assistance program, which has been beset by glitches, distributed $25 billion to renters in 2020. That infusion was followed by another $21.5 billion under the $1.9 trillion American Rescue Plan Act, which President Biden signed into law on March 11, 2021. The aid for homeowners was aearmarked in that law, and it’s finally becoming available after a 10-month wait.
“This relief for homeowners should have come earlier,” Reilly says. “The pandemic didn’t discriminate between renters and homeowners. Now that the money’s here, how thin will it be spread? That’s the unknown.”
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