U.S. Department of Housing and Urban Development ("HUD") Secretary Benjamin S. Carson and Federal Housing Finance Agency ("FHFA") Director Mark A. Calabria testified on recent initiatives to support the housing market in response to COVID-19.
Dr. Carson stated that HUD has allocated approximately one-half of the $12 billion in funding provided through the Coronavirus Aid, Relief and Economic Security (CARES) Act. Half of those allocations went to Community Development Block Grant funds, and one billion to Emergency Solutions Grant funds. Additional significant allocations went to the Public Housing Operating fund, Tenant and Project Based Rental Assistance and Indian Housing Block Grant funds, among others. Dr. Carson also emphasized his continuing commitment to protect minority and underserved communities from COVID-19 and to identify policy approaches to support those communities.
Dr. Calabria highlighted FHFA initiatives to support renters and homeowners unable to make housing payments due to COVID-19. He described Fannie Mae and Freddie Mac ("Enterprise") efforts to create certain protections for borrowers and renters in connection with Enterprise-backed mortgages. He explained that FHFA (i) imposed a temporary moratorium on foreclosures and evictions for single-family homeowners, (ii) offered a mortgage payment forbearance option for single-family homeowners, and (iii) provided a forbearance option for multifamily property owners that prohibits tenants from being evicted for nonpayment of rent during the forbearance.
Dr. Calabria also highlighted FHFA initiatives to ensure the proper functioning of the mortgage market. He described how FHFA instituted a four-month limit on servicers' obligations to advance principal and interest payments on loans in forbearance, a step which, he said, has provided needed clarity and liquidity to nonbank servicers.
Originally published June 09, 2020.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
