Many homeowners have been left out of COVID-19 relief. They hope a new state program will help
Veronica Maxwell loves to show off her home in northwest Rochester.
Maxwell, a single mother, purchased a foreclosed duplex in 2003 and renovated it into a single-family home. She has two living rooms, both with fancy furniture, sparkly centerpieces, and wall-to-wall decor.
And the hairstylist works from home in a basement salon that’s just as decorative as the rest of her home.
Like many other small-business owners, though, she’s been dealing with a not-so-pretty situation. She said she has struggled to stay afloat during the pandemic, and her biggest insecurity has been keeping up with housing costs.
"All the bills are just falling, and you paid one, the other one due. So, it's just really, really hard," Maxwell said.
She lived off unemployment benefits and received a small Personal Paycheck Protection loan, but she wasn’t approved for any other grants she applied for. Maxwell currently owes over $6,000 in back property taxes and hopes a new government relief program, the Homeowner Assistance Fund, will get her out of the red.
"I did the application. The paper went through, and we're waiting to see what's going to come," Maxwell said.
The state program is a half-billion-dollar investment made through the American Rescue Plan to help thousands stay in their homes.
Homeowners who earn equal to or less than 100% of the area median income can apply. If approved, the funds can be used toward mortgage payments, utility bills, property taxes, and other housing costs. Applications opened in January, but the planning to roll out the program started almost a year ago.
The program is modeled after the Hardest Hit Fund, a relief program for homeowners affected by the 2008 housing crisis. Over the years, that fund has been criticized for failing to reach enough homeowners, but with this new program, there is a greater effort to ensure people who need the money most will have access.
"We wanted to make sure we were getting to communities that were disproportionately impacted by COVID,” said Dina Levy, senior vice president of the Office of Community Renewal, the state agency that runs the program. “And also who have historically been disproportionately impacted anytime there's an economic crisis, which by and large is communities of color.”
Levy said roughly 60% of applicants so far are people of color, and they have been tracking applications daily to measure their target outreach.
Despite foreclosures being at their lowest in the last quarter of 2021 when the foreclosure moratorium was still in effect, delinquency rates, including loans in active forbearance, had more than doubled since before the pandemic.
Community organizations like PathStone and Empire Justice Center serve as middlemen between the state and homeowners in the Rochester area. Both organizations have been helping homeowners throughout the pandemic navigate their options.
Mary Leo, executive director of PathStone's Housing Council, said banks and the foreclosure moratorium provided short-term plans to keep people from losing their homes. Still, those plans haven't decreased stress for homeowners.
"Very few have actually lost their housing, but they're all very concerned on what their next steps are going to be," Leo said.
Those next steps include renegotiating with the banks to mitigate the loss. Structured into the program is a partnership with the state's Attorney's General Office to help advocate with mortgage lenders on behalf of homeowners.
Levy understands how important mitigation strategies are to help stabilize homeowners. She worked on the national mortgage settlement as an adviser to New York's attorney general in 2012.
She said the last housing crisis was different than the current one and is one that she hopes may lead to a faster recovery.
PathStone has already helped over 100 families apply for assistance and will continue until the application window closes on Friday. Starting on Saturday, interested homeowners will be added to a waiting list.
The state reports about 26,000 people have applied for help, which has a cap of $50,000 per household. Funds aren’t guaranteed, and many applicants are still waiting to hear back on whether they’ll be approved.
Levy said applications continue to roll in daily, and it will take time to ensure that they are processing them correctly.
“I wish it could happen as fast as people want it to,” Levy said, “but it does take time and we do have to follow the process.”
Maxwell applied in early January and is still waiting to hear if she will receive any money at all. She said she's not ready to quit yet.
"I've come too far to give up right now. I'm not giving up. I just want to hear what they have to say," Maxwell said.