New program offers $146M in federal funds for struggling Louisiana homeowners

(The Center Square) – Louisiana has launched a new $146 million program designed to help homeowners struggling to pay their mortgages because of the COVID-19 pandemic.

Gov. John Bel Edwards announced the Louisiana Homeowner Assistance Fund will provide up to $25,000 per eligible homeowner to help avoid foreclosure. The program is funded by the American Rescue Plan Act, which provided $10 billion to help homeowners behind on their mortgages.

Louisiana is set to receive $146.7 million to administer the Louisiana Homeowner Assistance Fund through the Louisiana Office of Community Development.

“We know that many Louisiana homeowners are struggling financially from the pandemic and, in many cases, have fallen behind on their mortgages and are facing foreclosure,” Edwards said Monday in a news release announcing the program. “This program provides an avenue for resources and assistance that has not been available before, and this is an important step to help ensure that low- and moderate-income homeowners and their families are able to stay in their homes. I encourage everyone who may be eligible to apply.”

To qualify, applicants must own or occupy a home in Louisiana as their primary residence, meet income qualifications and have experienced financial hardship associated with the pandemic, such as a job loss, reduction in household income, or significant increase in health care costs.

“The program is available statewide to homeowners experiencing financial hardship after January 21, 2020, and earning less than 150 percent of the area median income or 100 percent of the national median income, whichever is greater, based on U.S. Department of Housing and Urban Development income data,” Edwards said.

The relief comes as millions of Americans face foreclosures after the end of a moratorium on foreclosures of federally backed mortgages last year. The Biden administration extended forbearance options for the government-backed loans through the end of September, while the Consumer Financial Protection Bureau urged lenders to postpone foreclosure proceedings until 2022.

Foreclosures initially spiked in October as federal foreclosure protections expired, then declined in November, though the 10,471 U.S. properties that entered the foreclosure process that month represent a 99% increase from the year before, according to a U.S. Foreclosure Market Report by ATTOM Data Solutions, a company that tracks foreclosures.

“The fact that foreclosure starts declined despite hundreds of thousands of borrowers exiting the CARES Act mortgage forbearance program over the last few months is very encouraging,” said Rick Sharga, executive vice president of RealtyTrac, an ATTOM company. “It suggests that the ‘forbearance equals foreclosure’ narrative was incorrect, and that the efforts of the government and the mortgage servicing industry have prevented potentially millions of unnecessary foreclosures from happening due to COVID-19.”

Properties eligible for assistance through the new program include single-family attached or detached homes, condominium units, one to four-unit properties where the homeowner is living in one unit as their primary residence, manufactured homes taxed as real estate, and mobile homes not permanently affixed to real property.

The Louisiana Office of Community Development offers area median income tables for all of the state’s parishes to determine income qualifications, as well as applicant guidelines.

Applications are available on the state website. The state is encouraging those who need assistance in completing the application to call 1-833-88-LAHAF.