$ 7 million left in Connecticut’s COVID mortgage fund

Connecticut distributed nearly $ 4.9 million in mortgage assistance during the first two phases of its homeowner assistance program, leaving just over $ 7 million in federal funds unused.

This money should be used to cover the installation costs for the entire Homeowner Assistance Fund Program such as advertisements, other marketing costs, and the price to establish a web portal for apps through an external provider, said Nandini Natarajan, CEO of the Connecticut Housing Finance Authority.

The financial authority is also discussing internally a possible third phase with unused dollars before the start of the full program. But details have not been finalized, Natarajan said.

It is not known when the full program will be launched. The state’s financial authority submitted its plan to the US Treasury Department on October 4 and is awaiting approval, Natarajan said. Once the plan is approved, the program can take 30 to 45 days to launch, Natarajan said.

Natarajan said it could be in early 2022.

“We are doing everything we can to prepare,” she said. “We are working on the creation of the software platform and we are trying to prepare these elements so that when we hear we can launch. “

The program, funded by the American Rescue Plan Act of 2021, aims to prevent foreclosures in owner-occupied homes for people who have been financially affected by COVID-19. Connecticut was one of the few states to have started a pilot program.

The pilot program was funded with approximately $ 12 million, of which $ 10 million was earmarked for direct aid. The full program is expected to be funded to the tune of approximately $ 123 million.

The programs aim to prevent seizures following the pandemic. During the pandemic, the federal government allowed up to 18 months of withholding or temporary freezes on mortgage payments. Many of these options expire this fall.

Connecticut has a particularly high 90-day mortgage delinquency rate, data shows.

Complete Connecticut Program will have higher income eligibility limits, include people facing foreclosure for lack of tax and other fees, and have more participating mortgage service providers, Natarajan said.

It will also provide assistance of up to $ 30,000. The pilot program only allowed up to $ 20,000 in assistance.

The state’s pilot program provided assistance to 341 homeowners. The median grant amount was $ 14,844, and the largest number of scholarship recipients were from Hartford County, according to data released this week.

“We were able to secure funding for 341 applications, which I thought was a good number to only work with a few servers,” Natarajan said. “I was delighted that there appeared to be a good distribution of applicants across Connecticut. “

The highest number of applicants – 268 – also cited financial hardship caused by job loss, time off or cut wages during the pandemic. Other reasons for the financial loss included losing self-employment, having to stay home with a child when schools and daycares closed, and caring for a sick parent or applicants who lost. income when they contracted COVID-19, data shows.

And most said their income came from employment. Loraine Martinez Bellamy, a lawyer at the Connecticut Fair Housing Center who focuses on foreclosure prevention, said she suspected many of them were people who fell behind when the pandemic started.

Many of her clients are back to work, Martinez Bellamy said.

She said the low percentage of ineligible people indicate a process that does not have overly burdensome documentation requirements.

“I was at least happy to see that they paid out almost $ 5 million,” she said.

But the pilot program only allowed mortgage assistance. Many people in Connecticut face foreclosure due to tax failures, condominium association fees, or other bills, she said.

Throughout the pandemic, there were more safeguards in place for people facing foreclosure due to mortgage default, and mortgage foreclosures tend to progress more slowly than foreclosures of other types. Martinez Bellamy said.

“These are the people who are most at risk of losing their homes while the program is being developed,” she said.