Source: Pew —
The U.S. Treasury Department released guidance in August that made financial assistance available to homeowners experiencing financial hardship linked to the COVID-19 pandemic. The aid could be offered to those with traditional mortgages and those using alternative financing to purchase a home, including many who previously had been excluded from earlier federal and state programs.
Alternative financing is portrayed as another pathway to homeownership, but experts warn that these arrangements lack the important protections that accompany mortgages, potentially placing borrowers at risk.
Almost $10 billion from the American Rescue Plan Act will be allocated to help homeowners. Congress included the Homeowner Assistance Fund (HAF) in the sweeping legislation enacted in March, and the new guidance spells out how Treasury will disburse the emergency money to eligible states, territories, and Indigenous lands. For example, those eligible could include owners with land contracts—financial agreements directly between sellers and buyers without the involvement of traditional lenders—and those with loans secured by manufactured homes. In April, Treasury distributed initial payments to eligible jurisdictions that requested assistance in amounts equal to 10% of each entity’s total allocated funds.