Federal Funds Would Help Prevent Potential Avalanche of Foreclosures in Communities Hit Hardest

WASHINGTON, D.C. [04/09/20]—In an effort to prevent the coronavirus pandemic from sparking a full-blown housing, eviction, and foreclosure crisis, U.S. Senator Tina Smith (D-Minn.)—a member of the Senate Housing and Banking Committee—is backing legislation led by U.S. Senators Jack Reed (D-R.I.) and Sherrod Brown (D-Ohio) that would provide a new $75 billion Housing Assistance Fund to help households struggling to make ends meet.

Prior to the COVID-19 pandemic, I traveled across our big, diverse state, and saw that virtually every community in Minnesota is experiencing a serious housing shortage. In some communities, it was already a crisis,” said Sen. Smith. “And now, given the economic fallout of this pandemic, the problem is only getting worse. I am deeply concerned and thinking about the Minnesotans who are scrambling to make ends meet and keep their housing right now. This assistance will help Minnesotans who are impacted by the economic fallout of COVID-19 keep their homes, stay safe and healthy."

The Housing Assistance Fund would provide a flexible source of federal aid to all state-level Housing Finance Agencies (HFAs) to keep people in their homes. HFAs could use federal funding to help struggling households remain in their homes while they search for new employment or wait to get back to work.  Financial assistance could go toward mortgage payment assistance; utility payments; and other support to prevent eviction, mortgage delinquency, default, or foreclosure, or loss of utility services.

The bill would provide assistance to communities nationwide and includes a small state minimum, ensuring each state would receive no less than $250 million.

The bill is being cosponsored by all Democratic members of the Senate Banking Committee, including Senators Jack Reed (D-R.I.), Sherrod Brown (D-Ohio), Jon Tester (D-Mont.), Brian Schatz (D-Hawaii), Doug Jones (D-Ala.), Elizabeth Warren (D-Mass.), Kyrsten Sinema (D-Ariz.), Mark Warner (D-Va.), Bob Menendez (D-N.J.), Chris Van Hollen (D-Md.), and Catherine Cortez Masto (D-Nev.).

The COVID-19 pandemic is already slowing down and disrupting the U.S. housing market. And in spite of interest rates being historically low, the volume of mortgage applications for loans used to purchase homes was down 24 percent compared with a year ago for the week ending March 27, according to data from the Mortgage Bankers Association.

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