MBA, Trade Groups Ask Biden to Create $25 Billion Housing Assistance Fund

The Mortgage Bankers Association and nearly 40 industry trade groups, community organizations and real estate businesses yesterday asked President Joseph Biden Jr. to include a $25 billion Housing Assistance Fund as part of the Administration’s proposed $1.9 trillion pandemic relief package.

The organizations have formed a collaborative to achieve 3 million net new Black homeowners by 2030, which would increase the Black homeownership rate to more than 50 percent, a significant step towards closing the homeownership gap for people of color. The letter emphasizes the need for direct assistance to reduce the number of Black households at risk of losing their homes as a result of the economic impact of the pandemic.

“We are requesting that you include a $25 billion Housing Assistance Fund, modeled on the Hardest Hit Fund, to provide funds to state housing finance agencies to help homeowners with COVID-19 hardships bring their mortgage loans current through targeted assistance,” the letter said. “The funds would be used for mortgage payment assistance, utility payments, property tax assessments and other support to prevent eviction, mortgage delinquency, default, foreclosure or loss of utility services.”

The Biden-led American Rescue Plan seeks to prevent “untold economic hardship for homeowners” by extending the foreclosure moratorium and continuing applications for forbearances on federally backed mortgages.

The letter noted for residential homeowners, mortgage forbearance is an essential home retention tool for short-term financial hardships. “Prolonged forbearance without assistance to reduce or pay off missed payments may not be enough to stave off foreclosure, particularly for households facing long-term reductions in income or with limited home equity,” it said. “It is appropriate and essential for the federal government to extend the same missed-payment relief to these homeowners as renters, using the same income guidelines that exist in the current rental assistance program being administered by the Treasury Department.”

Importantly, the letter emphasized, the growing risk to homeownership has profound implications for people of color, who are especially at risk, noting the Black homeownership rate, which plummeted during the Great Recession, has never fully recovered.

“Black homeownership today is as low as it was in 1968 when the Fair Housing Act was passed. Our country cannot afford to see more damage done to minority homeowners,” the letter said. “According to the Mortgage Bankers Association, there are currently 3.8 million homeowners who are past due on their mortgage. Census Bureau Household Pulse Survey data for the period December 9-21 indicates that more than half of these homeowners are people of color. One in five Hispanics and nearly a quarter of all Black mortgage holders reported being late on their mortgage. Our organizations are committed to increasing homeownership rates for all people of color and closing the homeownership gap, but we cannot do so when we continue to lose more homeowners to COVID-19-related financial hardships.”

House Speaker Nancy Pelosi, D-Calif., said Thursday the House would move “immediately” on the American Rescue Plan; the bill is expected to face stiffer resistance in the Senate.