What is the Homeowner Mortgage Relief Program?
Washington State has proposed creating a new homeowner relief initiative called the Homeowner Mortgage Relief Program. It is the entity that will be responsible for managing the distribution of federal funds that the state is scheduled to receive in the spring of 2022. The funds come from The American Rescue Plan Act, which allotted close to $10 billion dollars to help homeowners through the Homeowner Assistance Fund (HAF).
What is the purpose of the Homeowner Mortgage Relief Program?
The purpose of the Homeowner Mortgage Relief Program aligns with the purpose of the federal Homeowner Assistance Fund, which is “to mitigate financial hardships associated with the coronavirus pandemic” by preventing “homeowner mortgage delinquencies, defaults, foreclosures, loss of utilities or home energy services.”
Per the Act, funds can only applied towards the following approved categories:
- Mortgage payment assistance, and other financial assistance to allow a homeowner to reinstate a mortgage or to pay other housing related costs related to a period of forbearance, delinquency or default.
- Principal reduction
- Interest rate reductions
- Payment assistance for utilities, including electric, gas, home energy, water, internet, homeowner’s insurance, HOA dues
The funds have been distributed to the states based on rates of mortgage delinquencies and unemployment.
How much did Washington State receive?
Washington State has received $173,153,935. These funds are available to homeowners through September 30th, 2025.
The Washington State Department of Commerce (Commerce) is the main agency responsible for disbursing the funds and working with eligible homeowners.
Commerce has released their first draft of their pilot program to help us understand how the funds will be used.
The HAF Funds will be used to support 5 programs in Washington:
Maintain and Expand the Washington Homeownership Hotline: This hotline helps connect you to a non-profit housing counseling agency or civil legal aid provider in your area. The hotline is going to be the first step in getting you into the process to apply for the HAF funding. The hotline phone number: 1-877-894-4663 (HOME).
Retain and Expand the Default and Foreclosure Housing Counseling Program: This program connects you with a counseling agency that can try and point you in the right direction based on what type of housing assistance you need. These counselors will be responsible for referring you to the Homeowner Mortgage Relief Program (more info below) where you can apply to receive HAF funds.
Maintain and Expand the Civil Legal Aid Network: There are a variety of civil legal aid networks that have non-profit attorneys to help with housing issues. Under the HAF program, the ways in which these attorneys can help you are going to be expanded beyond just non-judicial foreclosures to include judicial foreclosures, utility lien issues, and tax lien issues.
Mediation Fee Support for Low-Income Homeowners: Washington state has the Foreclosure Fairness Mediation Program. As part of this program, you are required to pay a mediation fee of $300 to the Mediator. Some of the HAF funds will be used to help cover these fees.
Utility Assistance: Because the federal government stated that one of the goals of the HAF program is to help with utility assistance, Commerce is going to develop a program where you may be able to get payment assistance for unpaid utilities.
Washington State’s new Homeowner Mortgage Relief Program will be the entity providing the funds
This is the program that is going to be responsible for actually giving money to homeowners who are struggling to make mortgage payments.
How much money can I get from HAF?
- The maximum amount of money you can receive (if eligible) is $25,000. These payments have to be used for unpaid mortgage payments, unpaid utilities or unpaid county property taxes.
- You may be able to get an additional $12,500 if you can prove that you are:
- A “socially disadvantaged individual.” This is someone who has been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group.
- A First Generation Homeowner – meaning, you are the first person in your family to own a home.
- Someone who lives in a historically ethnic neighborhood where the residents are shown to be facing displacement.
What are the requirements to receive the HAF funds in Washington?
- Your property must be located in Washington State.
- You must be the owner on record of the property.
- The property receiving funds must be your primary residence (these funds will not apply to vacate homes or rental properties).
- You must have been current on your mortgage PRIOR to April 1, 2020. This ensures that the HAF funds are reserved for people who defaulted as a result of the pandemic.
- You must have undergone financial hardship starting March 1, 2020 (or later) as a direct result of the pandemic.
- Your income during the period when you were impacted must be below the Area Median Income (AMI) for your county. This means you had to have been making less than the average income in your county during the period of financial hardship.
- You have to show that there is a reasonable expectation that you can continue making mortgage payments in the future. This means that the program is designed to help people who are back on their feet in the present day and can easily make mortgage payments moving forward without being at risk of defaulting again.
You can only enter the program with a referral from a foreclosure counselor or a civil legal aid attorney
You must speak with a housing counselor or civil legal aid attorney first before being able to apply for the funds.
If you qualify for and receive funds, payments will only be made directly to the mortgage servicer
If you qualify for HAF payments, Commerce will make payments directly to your mortgage servicer (or utility company or county for tax issues).
You will not be issued a check for the amount of money.
Payments will only count toward your past unpaid payments (or arrears)
You will not receive HAF Funds for any future payments. You can only receive assistance if you are behind on payments.
What is the process for getting into the Homeowner Mortgage Relief Program?
- Call the hotline 1-877-894-4663 (HOME)
- A hotline representative will refer you to a housing counselor or civil legal aid attorney if they believe you may be eligible for HAF funds AFTER they review you for other options that may be available to you
- If you qualify for HAF funds, you will be partnered with a housing counselor or civil legal aid attorney who will help you apply for the funds.
As of today’s date (January 26th, 2022), there is no application for HAF funds available yet
The funds won’t be available until they become part of the state’s operating budget which doesn’t happen until July 1st, 2022.
Homeowners who have alternatives to HAF funds will be required to pursue those options first
Commerce has listed the following things as alternatives that homeowners must look at FIRST before applying for HAF funds:
- Other homeowner relief programs
- Forbearance or Forbearance Exit Programs
- Loan Modifications
This sounds like housing counselors will make homeowners apply for loss mitigation options FIRST before reviewing them for HAF Funds. So, you may want to explore these options now in the event you’re not eligible for HAF funds down the line.
Here is a guide to your loss mitigation options.
Mortgage Relief Options For Washington Homeowners
Mortgage issues are complex. Banks and mortgage servicers can be very uncooperative. If you think you might need some help, you have some good options. Here are three articles to help you understand the help that is available to you.
What Can a Mortgage Attorney Do For You
What to Look For In a Loan Modification Attorney
What Can a Foreclosure Attorney Do For You