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$5 million in mortgage assistance will help Vermont homeowners hurt by pandemic

By: Mia Watson on 7/10/2020

Vermont’s new Mortgage Assistance Program was announced today to help low-income homeowners who have fallen behind on their mortgage and are facing economic hardship brought on by the COVID-19 pandemic. The program will provide up to three monthly mortgage payments directly to the servicer of the mortgage with a goal of preventing future foreclosure. Administered by Vermont Housing Finance Agency (VHFA) with $5 million of the funding provided to Vermont through the federal CARES Act, the program is available to any homeowner who meets the eligibility criteria, and is not just for VHFA borrowers. 

“It’s critical that we keep moving forward and fighting this virus, and I understand recovery starts with everyone having a safe and secure place to call home,” said Governor Phil Scott. “I’m pleased to see the launch of the Mortgage Assistance Program, which will be an important resource for keeping Vermonters in their homes.”

When the COVID-19 pandemic struck in March, Joy and Eryk Whitehouse of Barre learned first-hand how dependent housing is on wages. When Vermont’s “Stay Home/Stay Safe” orders were issued, the restaurant where they both worked as managers shut down and the Whitehouses temporarily lost their jobs.  

“We started frantically looking at our options as soon as the restaurant closed down,” Joy Whitehouse explained. “I have never not been able to pay my mortgage before this. Our home is the only one my children have ever known, and we were really worried about what we would do,” she continued. 

Like the Whitehouse family, it is estimated that 10% of mortgage holders have faced an economic hardship due to COVID and requested forbearance from their servicer. As of June 27, more than 44,000 Vermont workers have filed for unemployment benefits--eight times as many as in the beginning of March. 

“Vermont homeowners who were laid off or are working reduced hours may have fallen behind on monthly mortgage payments and are trying to identify their options before the foreclosure moratorium expires,” remarked Eric Hoffman, VHFA’s Manager of Business Development, who previously worked as a foreclosure intervention counselor. “The Mortgage Assistance Program will be a great way for many Vermonters to catch up and cover some of their missed payments,” Hoffman added.

Homeowners must meet certain requirements to be eligible for mortgage assistance through the program. Only mortgages for homes used as primary residences, those started before March 1, 2020 and those held by Vermonters who meet income limits and have missed at least two payments will be considered. VHFA will accept applications until August 31, 2020. Due to the limited funding available, VHFA will prioritize those with the lowest income and that are most at risk of foreclosure. There is no assurance that any individual application will be funded.

“These funds will fill an urgent need to help homeowners across the state safely stay in their homes, even if the pandemic causes them to lose income,” said Maura Collins, Vermont Housing Finance Agency’s Executive Director. “VHFA is applying the full force of its decades of experience working with mortgage servicers and homeowners to implementing this program.” 

The Mortgage Assistance Program was created by the Vermont Legislature with the passage of H.966, an act relating to COVID-19 funding and assistance for broadband, connectivity, housing and economic relief.  In addition to the Mortgage Assistance Program, the act dedicated funding for a variety of legal and counseling services, housing and facilities, eviction protection, rental assistance and other housing supports for Vermonters facing economic hardship totaling $62 million. Governor Scott signed the bill on July 2, 2020.

Mortgages eligible for assistance through the new program are not limited to those made through VHFA’s standard programs.  Information and application materials are available on VHFA’s website at www.vhfa.org/map. A Mortgage Assistance Program information hotline is open 9 am – 4 pm, Monday through Friday, at 1-800-889-2047.

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Comments

I think the mortgage assistance is great but being behind 2 payments should in theory be impossible with the CARES act previously in place, as well as unemployment being boosted. People will need this for the following months when boosted unemployment is over and the CARES act forebearance program has expired. I just wanted to share my thoughts because I suspect the worst is yet to come, and this program is just coming too early the way it is designed and with its deadline of August 31st. At the very least, the deadline should be pushed further out, possibly just until the funds run out.

Thanks for sharing your concerns, Jan. We agree that the amount of funding may not be adequate and it’s very possible that more will be needed after the Pandemic Unemployment program ends. What we’ve done is to design the mortgage assistance provided through the MAP program to complement the forbearance arrangements that have been made for many Vermont mortgages. The MAP grant can cover payments not made during the forbearance period and is paid directly to the servicer to reduce the outstanding arrearage.  This should help homeowners resume making payments after a forbearance period ends (because there will be fewer skipped mortgage payments to make up for).  

 

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