Housing

COVID-19 reverification of employment and appraisals for FHA Single Family loans

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The United States Department of Housing and Urban Development temporarily changed re-verification of employment and appraisal rules for FHA Single Family programs.  Until May 17, 2020 mortgagees do not need to re-verify employment within 10 days of the Note or within 10 days of loan disbursement if there is no loss of employment by the borrower.

Appraisers may do Exterior-only (viewing from the street) or Desktop-Only (relying on various documents and not viewing the property) appraisals for FHA Single Family loans.

There changes also apply to refinances and reverse mortgages.  (Mortgagee Letter 2020-05, March 27, 2020.)

COVID-19 foreclosure and eviction moratorium for Sections 184 and 184A loans

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The United States Department of Housing and Urban Development has authorized a moratorium on foreclosures and evictions for loans guaranteed under the Section 184 Indian Home Loan Guarantee Program and Section 184A Native Hawaiian Housing Loan Guarantee Program for 60 days.

Properties secured by Section 184 or 184A guaranteed loans are subject to a moratorium on initiation of foreclosures and foreclosures in process for 60 days.  Eviction of people from properties previously secured by Section 184 or 184A guaranteed loans are suspended for 60 days.  (DLL -2020-04, March 20, 2020.)

COVID-19 suspension of foreclosures and evictions for Fannie Mae and Freddic Mac

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The Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to suspend foreclosures for 60 days because of COVID-19.  This suspension applies to Fannie Mae and Freddie Mac backed single family mortgages.

Previously the Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac would provide payment forbearance for borrowers impacted by COVID-19 for 12 months.  (News Release, March 18, 2020.)

VA mortgage special relief for COVID-19

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The Department of Veterans Affairs (VA) has issued information regarding special relief for COVID-19.  VA will conduct meetings by telephone with persons for people with symptoms of or exposed to COVID-19.

VA encourages holders or guaranteed loans to extend forbearance to borrowers in distress because of COVID-19. VA encourages waiving late charges on affected loans.  Servicers are encouraged to suspend credit reporting on affected loans.  (Circular 26-20-7, March 16, 2020.)

VA request for foreclosure moratorium

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The Department of Veterans Affairs (VA) strongly encourages loan holders to establish a 60 day moratorium beginning on March 18, 2020 on completing foreclosures or initiating new foreclosures on loans.  VA regulations allow additional interest in a guarantee claim when termination is delayed by VA requested forbearance.

Loan holders should consider the impact of completing an eviction action when choosing to retain a property instead of conveying to VA.  VA requests holders not expose Veterans and their families to additional risk through an eviction action.  (Circular 26-20-8, March 18, 2020.)

Interim housing and homeless program guidance on COVID-19

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The California Department of Social Services (CDSS) has issued guidance regarding CDSS housing and homeless programs for COVID-19.  The guidance relates to CalWORKs Homeless Assistance (HA), CalWORKs Housing Support Program (HSP), Bringing Families Home (BFH), Housing and Disability Advocacy Program (HDAP) and Home Safe.

CDSS does not limit the number of days of interim shelter, including nights in a hotel or motel, for HSP, Bringing Families Home, HDAP and Home Safe.

HA applications are not required to be in person or to include a face-to-interview.  Counties can complete the CW 42 application form for the client and have then sign electronically.  Existing rules requiring issuing 3-days of benefits while homelessness is verified remain in effect.  However, counties are strongly encouraged to issue benefits without requiring clients to come to the office, including allowing sworn statements and granting good cause instead of requiring clients to come to county offices.  Although existing guidance requires counties to issue vendor payments when there has been a finding of mismanagement, if there is no feasible way to issue vendor payments because of COVID-19, counties should consider issuing benefits on the client’s EBT card.

Clients affected by COVID-19 may be eligible for an exception to the once-every 12 months rule for HA.  For example, if a parent in an assistance unit is concerned about infection and asks to isolate themselves, HA should be granted based on an exception because of illness.

HDAP funds can expand existing housing options used by HDAP clients, including shelters, recuperative care housing, hotel or motel leases, or interim housing programs.  For example, expanding a shelter program could include offering specialized quarantine options or leases with motels to provide housing for homeless persons impacted by COVID-19.  Counties can also purchase supplies for a specialized quarantine area or establish a new shelter program for HDAP clients specific to COVID-19.  In addition, HDAP funds can be spent on outreach to locate persons potentially eligible for HDAP who are residing in homeless camps who require medical care related to COVID-19.

Home Safe funds can be spent on landlord engagement, including incentives for landlords to participate in Home Safe.  Such payments can include in-kind goods to address COVID-19 impacts such as medical or sanitizing equipment and supplies.  Home Safe funds may also be used for interim housing, including motels.

HSP funds can be used for a range of financial and supportive services, including providing interim housing, helping participants navigate systems of care, providing rental assistance, incentive payments in the form of good for landlords participating in HSP, and supplies necessary to keep housing habitable.  Counties can provide landlord mediation and discussion of tenant’s rights to avoid eviction or housing displacement.

BFH for families experiencing homelessness or at risk of homelessness with an open child welfare case can include interim housing, tenant engagement, case management, public systems assistance, and conflict mediation with landlords or neighbors.  BFH can locate and pay for motel stays for families seeking interim housing that is not a shelter.  BFH can also pay for cleaning supplies.

A three-day notice to pay rent or quit meets eligibility requirements for HA, BFH, HDAP and Home Safe.  HA can be used to pay up to two month rental arrearages to prevent eviction.  (ACWDL, March 19, 2020.)

The HA provisions of this letter are superceeded by All County Welfare Directors Letter, March 31, 2020, summarized here.