Months after the launch of its pilot program, Connecticut’s full assistance program for homeowners who were affected financially by COVID-19 is now open for applications.
It’s meant to avoid foreclosures for nonpayment of mortgages and other foreclosures for reasons such as back taxes, insurance and condo association fees.
The program, called MyHomeCT, is funded with about $123 million in federal money. Connecticut homeowners who have a household income up to 150% of the area median income and suffered a pandemic-related financial hardship are eligible.
Homeowners are eligible for up to $30,000 in grants. Applications are available online.
It’s the latest in a series of programs designed to help people recover from the pandemic. In February, the state Department of Housing closed applications to its UniteCT program, which provided rental assistance to tenants affected by the pandemic.
The homeowners assistance program was funded through the American Rescue Plan. The U.S. Department of the Treasury is overseeing the program, which had nearly $10 billion set aside to be disbursed among states, tribes, territories and Washington, D.C.
The Connecticut Housing Finance Authority is managing the state’s program. The agency distributed about $4.9 million through the pilot program, and about $14 million is designated for administrative costs. About $104 million is left for awards in the full program.
The program has 51 participating mortgage servicers. Condominiums, manufactured homes and one- to four-unit house mortgages are eligible.
The pilot program had lower income limits and fewer mortgage servicers participating than the full program. So far, the program has awarded money to 347 people. The median grant amount was $14,844, according to the finance authority’s data.
“We worked specifically with a set number of servicers, and we also focused on a certain area median income,” said Marcus Smith, the finance authority’s director of research, marketing and outreach. “We wanted to make sure that lower income folks had access.”
The higher income limits and number of servicers will likely mean more people will participate in the full program, Smith added.
“I think we’re excited, and we’re confident that we’ll get a good uptake,” he said.
While the number of foreclosures in Connecticut took a nosedive at the start of the pandemic, they were ticking up again last year as federal protections ended.
The federal government set a moratorium on foreclosures for mortgages guaranteed by Fannie Mae or Freddie Mac in March 2020, and those protections ended in July 2021. Homeowners could also opt for extended 18-month forbearances, or pauses on mortgage payments. The first of those 18-month options expired in the fall.
ATTOM, a company that gathers data on foreclosures and other topics, estimates that the number of properties with foreclosure filings was at just over 78,000 nationally in the first quarter of 2022, up about 39% percent from the last quarter and 132% from 2021.
Jeff Gentes, managing attorney for the Fair Lending and Foreclosure Prevention Project at the Connecticut Fair Housing Center, said the center is seeing more cases from people whose forbearance options expired.
“We’re starting to see what we long expected and what frankly seemed delayed, which is that people’s mortgage companies are not offering them a workout after their forbearances,” Gentes said.
This means the homeowners’ assistance program is coming at a critical time, he added.
The number of foreclosures filed per week has hovered around 160 lately, he said. While they’re elevated compared to earlier in the pandemic, it’s still well below pre-pandemic numbers.
“So far it’s been mostly a pilot program to pick off some pending foreclosures before the program goes into full launch mode," he said. “We’re hoping that it [the full program] goes well.”