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The following was written by Dawn Bauman, Senior Vice President, Government & Public Affairs at the Community Associations Institute and is recommended reading by our Senior Partner Charlie Perkins: 

One of the challenging factors of the COVID-19 pandemic is the economic impact on individual residents in community associations. As homeowners become unable to fulfill their financial obligation of paying assessments, they will require direct access to resources that can provide relief.

The American Rescue Plan Act passed by Congress and signed into law on March 11 includes the Homeowner Assistance Fund to help Americans avoid foreclosure and stay in their homes. CAI is very pleased to report that our advocacy efforts have paid off, as homeowners association assessments fall under eligible housing expenses when applying for the fund.

Here are other key points to know about the Homeowner Assistance Fund:

  • The funds are appropriated to the U.S. Department of Treasury and distributed, upon request, by governors to their state’s housing finance agency.
  • Governors have 45 days to inform the U.S. Department of Treasury that their administration will create a program under the Homeowner Assistance Fund. Only states electing to participate during the 45-day signup period will receive an allocation from the Homeowner Assistance Fund to create state programs.
  • Under the Homeowner Assistance Fund, homeowners can receive:
    • Financial assistance to reinstate a mortgage or to pay other housing-related costs related to a period of forbearance, delinquency, or default, such as principal and interest rate reductions.
    • Payment assistance for:
      • Utilities, including electric, gas, home energy, and water.
      • Internet service, including broadband internet access service, as defined in section 8.1(b) of title 47, Code of Federal Regulations (or any successor regulation).
      • Homeowner’s insurance, flood insurance, and mortgage insurance.
      • Homeowners association or condominium association common charges.
    • The state housing finance agency establishes the framework for granting funds to homeowners for eligible expenses.
    • It is expected the program will be a grant (not a loan) given to individual homeowners and not community associations. Therefore, it’s important for association boards, managers, and attorneys to direct homeowners financially impacted by the pandemic to this important resource.
    • The Homeowner Assistance Fund has different requirements from Coronavirus State and Local Fiscal Recovery funds, as there are no conditions placed on state or local governments for electing to participate in the latter.

CAI is urging governors to elect to participate in the Homeowner Assistance Fund and for state housing finance agencies to specifically plan for relief funds for homeowners to pay their assessments when establishing the framework for disbursement.