Hawaii doubles Homeowner Assistance Fund benefit

Hawaii updated its Homeowner Assistance Fund program this month, doubling the maximum amount available and loosening requirements to open up benefits to more households.

The newly revised program, which was first introduced during the COVID-19 pandemic under provisions of the American Rescue Plan Act, now makes aid available to homeowners who may not have qualified when it was first introduced. Under the new terms, eligible households can apply for financial assistance regardless of whether they have fallen delinquent on their mortgage payments. The maximum amount of assistance available to each household increased to $60,000 from $30,000 as well.

The update also makes HAF funds available to holders of reverse mortgages and extends the length of time assistance can be provided for certain loans to a full year, compared to six months previously. 

Eligible Hawaii households in three counties who experienced financial hardship during the COVID-19 pandemic may use HAF funding for mortgage payments, certain property charges and utilities. In a departure from the original program, payment assistance is now available even to households without an existing mortgage. Applications are accepted through local program service providers.

The expansion of the state's program comes just weeks after the White House declared an end to the nationwide COVID public health emergency. The federal government alloted almost $10 billion in funding nationwide for state-administered HAF programs, with $50 million made available to the Aloha State to serve needy homeowners impacted financially by the pandemic.

With management, marketing and rollout of each program varying by state, the outcomes of HAF programs in each jurisdiction differ widely across the country roughly two years after federal funds were first made available. While a majority of states are still accepting new funding-assistance applications, the process is either closed or temporarily suspended in ten, according to the National Council of State Housing Agencies. 

In February, Pennsylvania suspended applications for its program while it moved funding disbursement in-house due to challenges working with a third-party vendor. 

At the same time, other states expanded eligibility requirements similar to Hawaii at some point, including New York, which opened up access to reverse mortgage borrowers last year. Its program is now closed. Meanwhile, South Carolina is extending the application period for its HAF, with more than $17 million in assistance still open to residents.

Earlier this month, a U.S. Treasury report also indicated Homeowner Assistance Fund benefits might end up being eligible for Property Assessed Clean Energy loans.

The updates to states' Homeowner Assistance Fund guidelines are being made as other pandemic-related federal relief programs have largely expired. The Consumer Financial Protection Bureau has regularly emphasized the need for servicers to make every effort at keeping struggling mortgage borrowers in their homes, making HAF a still-important tool in the housing industry's efforts.

Government agencies are, likewise, attempting to come up with updated servicing solutions that incorporate some of the characteristics of successful initiatives rolled out over the last three years.