Treasury officials said states could provide some of the $ 10 billion in federal funding to needy homeowners to help people who buy their homes with non-traditional home loans.
Guide released Monday for new Homeowners Assistance Fund allows states to provide a financial boost to qualified residents who are facing foreclosure on a mobile home loan or a home acquired under a title deed – a loan funded by the seller of the property. Some elderly residents who carried away reverse mortgage on their homes – a deal where a borrower can get cash for shares in their home – can also qualify for emergency money.
The Treasury Department’s decision to expand support for the program to those without traditional mortgages was made following persistent requests from lawyers and some state governments. A handful of states, including Texas and New Yorkmade preliminary plans that would allow them to allocate some of the money from the Homeowner Assistance Fund to those with mobile homes or homes purchased through business contractssometimes referred to as land contracts.
These homeowners are among the most vulnerable, as they can easily be foreclosed or evicted after missing out on just a few payments. And these borrowers, who usually have low credit ratings, usually pay higher than usual interest rates on the loans they take to buy a home.
The $ 10 billion in Homeowners Assistance Fund was included in the American Bailout Plan, a $ 1.9 trillion measure taken by Congress and the Biden administration to help Americans “get through the pandemic” in their homes. The money is distributed among the states, Indian tribes and territories of the United States.
The Homeowners Assistance Fund is separate from the $ 47 billion that the federal government is giving to states to help tenants face eviction, which was also included in the American Rescue Plan.