News

September 16, 2020

PA House and Senate Introduce Bills Expanding PHFA’s Rental & Mortgage Assistance Program

The Pennsylvania Senate and House have introduced legislation aimed at assisting Commonwealth residents to more easily access Federal CARES dollars directed toward rental and mortgage assistance. Landlords and potential rental and mortgage assistance recipients have had difficulty navigating the multi-step application process. The House and Senate versions of this legislation have much in common, but each addresses several specific items.

Rep. Susan Helm introduced HB 2868. Following passage of Act 24, the Pennsylvania Housing Finance Agency (PHFA) created and deployed two brand new programs in the matter of a few weeks.  While application volume was steady, feedback from PHFA and its partner organizations indicated that a few adjustments to the legislation would reduce barriers to participation and allow a more effective utilization of these critical resources.

The PA Senate has introduced a similar bill, SB 1290, aimed at improving access and utilization of the CARES Act Funds directed toward rental and mortgage relief. Primary sponsor of SB 1290 is Sen. Art Heywood.

The Pennsylvania Housing Finance Agency (PHFA) reports there are several issues causing the $175 million for the program to be underutilized. For example, a $750/month cap on payments to landlords and a $1000/month cap on payments to lenders are not enough for many to forgive the outstanding balances that remain. If this money is not spent by the end of the calendar year for its intended purpose, we might have to give it back to the federal government. Without these changes, we will leave our neighbors out on the cold.

Director of Community Outreach for Liberty Lutheran/Lutheran Congregational Services and Lutheran Disaster Response (LDR) program administrator for Eastern PA Julia Menzo reflects on the housing crisis, “Covid-19 has put the health, and economic stability of low income households most at risk across Pennsylvania. Our baptismal promises call us to seek justice for all in the name of Jesus. Despite federal action from the CDC creating an eviction moratorium until December 31, 2020, the language in the moratorium is unclear as to who exactly qualifies, and many will not qualify. Legislation introduced in the State House will address some of the shortfalls that the previous Pennsylvania eviction moratorium, which ended on August 31, allowed. Here at Lutheran Disaster Response, Eastern PA, we know that many seeking assistance under the program ending Aug 31 did not qualify because landlords were required to co-apply with tenants, and in many cases, there were disincentives to landlords to participate. Legislative action is one critical way we can work as the church to combat injustice. This new introduced legislation will allow more to qualify for assistance as together we work to build a stronger community safety net.”

The COVID-19 pandemic has had an unprecedented impact on the commonwealth’s economy and placed a tremendous burden on many homeowners and renters across Pennsylvania. In May, the General Assembly passed Act 24, which allocated $175 million to the Pennsylvania Housing Finance Agency (PHFA) to fund vital rental and mortgage assistance for Pennsylvanians. Unfortunately, the enacted legislation has created administrative and programmatic challenges that have hindered Commonwealth residents ability to access this valuable funding.

HB 2868 makes the following changes to the existing program:

Increasing maximum assistance caps by linking them to widely established industry standards rather than the current caps which do not reflect the Commonwealth’s diverse housing markets.
a.  130% of the current HUD Fair Market Rent for a 2-bedroom unit in the applicable county.
b. Median monthly owner costs as determined by the U.S. Census Bureau’s most recent American Community Survey, rounded to the closest $100.

Eliminate the requirement that households be at least 30 days in arrears for eligibility, thus removing the penalty for households who have prioritized housing payments over other health and safety expenses.

Extend the current application deadline through October 31st to accommodate the applications arriving in response to the other changes enumerated in this memo.

Remove the requirement that landlords and mortgagees waive their rights to remaining rent or mortgage obligation upon acceptance of CARES funding with the option to waive or participated in an alternative remedy.
a. Landlords and tenants would be allowed to enter into repayment agreements.
b. Mortgagees would assess borrowers’ eligibility under alternative loss mitigation programs where available based on the type of mortgage product.
c. In cases where the landlord or mortgagee agrees to waive the remaining balance, they would be entitled to a small financial incentive above the maximum assistance so long as it does not exceed the total monthly rent or mortgage obligation.

Permit the use of a small portion of the allocated funds to cover costs associated with administering the programs.  Administrative expenses could not exceed the lesser of 5% of the allocation of the actual expenses incurred.

SB 1290, in comparison, working with PHFA and the state’s network of housing advocates working on a comprehensive solution, suggests the following changes:

Allowing a small portion of the CARES Act funds (no more than 5%) to be used by counties to administer the program.

Linking maximum rental and mortgage assistance to other widely-established industry standards:

Basing maximum rental assistance to 130% of the HUD Fair Market Rent of a two-bedroom unit in the area (ranging from $928/month to $1,682/month).

Basing maximum mortgage assistance on the median monthly owner costs per the U.S. Census Bureau’s American Community Survey (up to $1500/month).

Allows landlords and mortgage holders to participate even if the tenant or homeowner hasn’t been in arrears for 30 days.

Eliminates the requirement that any remaining obligation for past due rent waived, instead says no fees or penalties on it may be imposed.

Replacing the requirement to waive remaining rent or mortgage payments in order to participate in the program with an option either to forgive the remaining payments in exchange for 25% of the remaining balance or offer a repayment plan, that may not include late fees or interest, which for renters must be at least 12 months long on 12-month or month-to-month leases.

Extends the application deadline to 31 October 2020.

A federal eviction moratorium issued by the Centers for Disease Control (CDC) is in effect from September 4, 2020 to December 31, 2020. The temporary moratorium on evictions extends vital protections to tens of millions of renters at risk of eviction for nonpayment of rent during the global pandemic.

Learn About Protections and Steps Renters Must Take. To be protected, qualified renters facing eviction should immediately provide a signed declaration to their landlords. For more details about the moratorium and a sample declaration that renters can use, the National Low Income Housing Coalition is producing a new resource to help educate renters and those at risk of eviction and homelessness on how to use the CDC moratorium on evictions. The current resource is in 7 languages, and they are adding more as needed. Learn more. 

 

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