Pennsylvania Mortgage Assistance and COVID Relief

Mortgage relief fund to help Pennsylvanians affected by COVID-related hardships gets off to a slow start; it approved and paid less than 10% of aid applications in the more than two months it was open, according to figures released by the state this week.

More than 7,200 applications were submitted as of the start of this week, but only around 440 have been approved and received funds.

The federally funded program opened in early February.

More than 2,000 applications, or about 25% of the total, have been approved but are still awaiting third-party verification from a lender or mortgage agent.

“The biggest bottleneck right now is service providers,” said Bryce Maretzki, director of policy and planning at the Pennsylvania Housing Finance Agency, which is responsible for administering the funds. Mortgage servicers are third-party companies that often handle loan administration tasks for mortgage lenders. In some cases, that’s outsourced to a contractor, which is an added complication, Maretzki said.

In a statement, the Mortgage Bankers Association of Southwestern Pennsylvania said it “has not been made aware of any issues with funds approved for eligible homeowners” under the program.

The process has also been slowed down due to some more complex applications where applicants need multiple forms of assistance – mortgage assistance, as well as utility and property tax assistance, all of which are allowed in the part of the program, Maretzki said. Additionally, IEM, the contractor contracted by the state to administer the program, had to hire additional staff, he said.

Applications should start flowing through the system faster in the coming months, he said.

The state has provided more than $4.3 million in aid, according to statistics from the Pennsylvania Housing Finance Agency. It has total aid of over $350 million and until 2026 to spend the money.

There had been concerns that the program was taking some time to get up and running in Pennsylvania before it launched.

To qualify for assistance: the accommodation must be your main residence; you must have experienced financial difficulties after January 21, 2020; you must have a household income less than 150% of the area median income (about $127,200 per year for a family of four in Allegheny County).

All funds will be disbursed directly to lenders and mortgage servicers, not homeowners.

For more information: www.pahaf.org or call 888-987-2423.