HUD’s Safety Net Responsibilities in Times of Crisis
Seth D. Appleton, Assistant Secretary for Policy Development and Research.
The United States is immersed in a public health crisis as it confronts the COVID-19 pandemic. The president has declared a national emergency, and federal, state, and local governments are deploying essential resources and urging citizens to stay at home. During times of crisis, it is critical that HUD programs continue to serve our most vulnerable and impacted citizens.
HUD programs serve as a safety net in times of crisis and uncertainty. Since the Great Recession, HUD has refined its tools to address these emergencies. Through our existing infrastructure of knowledgeable staff at the federal, state, and local levels, HUD is prepared to leverage resources and systems to rapidly disburse emergency funding. The Office of Policy Development and Research (PD&R) plays a crucial role within HUD’s infrastructure, developing the allocation formula, analyzing data, and reviewing past research to support HUD program offices.
HUD has already taken steps to respond to issues brought about by COVID-19 through the following programs:
Federal Housing Administration
The Federal Housing Administration (FHA) provides mortgage insurance on loans made by FHA-approved lenders. Mortgage insurance protects lenders against losses if property owners default on their mortgages. If FHA-insured homeowners cannot pay their mortgages because of a loss of work, the FHA has tools that allow lenders to keep borrowers in their homes during the crisis. In accordance with the recommendation of the Trump administration’s Coronavirus Task Force, on March 18, FHA announced a 60-day moratorium on foreclosures and evictions for residents of single-family homes with FHA-insured mortgages. This was followed by a mortgagee letter issued April 1st that provides these specific changes to HUD’s Loss Mitigation Options for Borrowers Affected by the COVID-19 National Emergency, including:
- COVID-19 National Emergency Standalone Partial Claim
- Exclusion of Borrowers impacted solely by the COVID-19 National Emergency from FHA’s PDMDA Guidance in Handbook 4000.1
- Extension Period for Home Equity Conversion Mortgages
Ginnie Mae (COVID-19 Press Release)
Ginnie Mae is a government-owned corporation that attracts global capital into the housing finance system to support homeownership for veterans and millions of homebuyers nationwide. Ginnie Mae serves as the principal financing arm for government mortgage loans, ensuring that mortgage lenders have the necessary funds to lend to customers. Ginnie Mae is available to guarantee payments on mortgage-backed securities if borrower equity, government insurance, and the mortgage backed security issuer are not able to cover the payments.
HUD’s Office of Public and Indian Housing (COVID-19 PIH Resources) and Office of Multifamily Housing (COVID-19 Multifamily Housing FAQ): Public Housing, Housing Choice Vouchers, and Project-Based Rental Assistance (PBRA)
If assisted tenants suffer a loss of income — and reports indicate a surge in recertification requests from assisted tenants — HUD will increase its share of the rent payment to keep assisted tenants in their units and protect landlord and PHA finances. Approximately 30 percent of both public housing residents and housing choice voucher recipients earn wages, representing roughly half of landlords’ tenant-paid income, and 19 percent of tenants in the PBRA program earn wages. HUD will increase its share of the rent paid as tenants get recertified due to a loss in income. The Coronavirus Aid, Relief, and Economic Security (CARES) Act appropriated funding on March 27, including $1.25 billion for housing choice vouchers, $687 million for public housing; and $1 billion for the PBRA program to meet the pressing needs of our assisted tenants. The funding also comes with broad waiver authority to allow flexibility and solve problems as they arise.
Emergency Solutions Grants (ESG)
The CARES Act appropriated $4 billion to the ESG program to help local governments and service providers reduce the spread of COVID-19 among those experiencing or at risk of homelessness and respond quickly to severe outbreaks. Last week, HUD announced grant availability for the first $1 billion of ESG funding. Funding that targets the homeless community will be allocated to build and operate emergency shelters, issue hotel and motel vouchers, provide essential services, prevent individuals from becoming homeless, and rapidly rehouse homeless individuals. The supplemental bill gives the HUD Secretary broad waiver authority for funds already in grantees’ hands. PD&R has a team working with the Office of Community Planning and Development (CPD) on a formula for targeting the balance, and we intend to move quickly.
Housing Opportunities for Persons With AIDS (HOPWA)
The CARES Act appropriated $63.7 million to the HOPWA program, which was fully allocated last week. This funding will be used to provide assistance for rent, utilities, and short-term lodging to address isolation and self-quarantine needs; ensure access to medical care and treatment for patients with HIV, chemical dependency treatment, and mental health treatment; provide nutritional services and assistance with daily living; and assist in job training and placement.
Community Development Block Grant (CDBG) (COVID-19 Response)
Under the CARES Act, local communities will receive coronavirus response funds from several sources. One source familiar to many local governments is the CDBG program, which received $5 billion in the supplemental bill to fill the gaps not covered by other funding sources, particularly services for low- and moderate-income households. HUD announced $2 billion in allocations last week. CDBG funds may be used for activities such as constructing medical facilities for COVID-19 testing and treatment; building living facilities for patients undergoing treatment; acquiring hotel or motel buildings to expand the capacity of hospitals to isolate patients during recovery; replace heating, ventilation, and air conditioning systems to temporarily transform commercial or school buildings into clinics or treatment centers; support businesses manufacturing medical supplies; and train healthcare workers and technicians to treat disease within the community. The PD&R team, together with CPD, is developing formulas to target the remaining funds where they are most needed.
Indian Housing Block Grant (IHBG) and Indian CDBG (ICDBG)
Last week, HUD allocated $200 million in relief funding for IHBG to help Tribes combat COVID-19 and an additional $100 million in ICDBG imminent threat funding that can target Tribes with the greatest need. The relief funding will be used to help Tribes carry out affordable housing activities and protect the safety and health of their members and communities.
For more information and resources related to COVID-19, please visit HUD’s COVID-19 page here.