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What is Indiana’s Homeowner Assistance Fund and what does it do for struggling homeowners?

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Homeowner Assistance Funds were established through the American Rescue Plan Act in 2021 to combat COVID-19-related setbacks. Indiana’s Homeowner Assistance Fund is the state’s fund for Hoosiers. (WFIU / WTIU)

Homeowner Assistance Funds were established through the American Rescue Plan Act in 2021 to combat COVID-19-related setbacks. Indiana’s Homeowner Assistance Fund is the state’s fund for Hoosiers. One listener wondered why applications were taking long to process and if others struggled with foreclosures in the process.

John Brengle is an attorney with Indiana Legal Services. He explained when an application for the program is started, the bank cannot foreclose.

“They cannot file a foreclosure if they haven't or if they have already filed a foreclosure, they cannot proceed with it as long as that application is pending,” he said.

If the application is approved and mortgage-related help is dispersed, the foreclosure will be dismissed. If the application is not approved, the foreclosure can continue.

According to the IHAF application portal, there have been more than 8,000 applications received. Of these applications, about 1,400 have been approved, more than 2,000 have been denied, and about 1,500 are pending responses.

For those awaiting a response, Brengle said to “keep regular communication with the homeowner counselor that you've been assigned to.”

The program helps with mortgage loan principles and interests, homeowner’s association fees, property taxes and other fees. The loan itself comes as a five-year forgivable loan – 20 percent of the loan is forgiven for every year a person remains in their home.

To be eligible for the program, Hoosier homeowners have to have experienced a financial hardship from the COVID-19 pandemic, own one mortgaged home as their primary residence and have an income equal to or less than 150 percent of the Area Median income. There are also additional underwriting criteria in certain situations.

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Despite this guidance, Brengle said anyone in need of financial help should apply.

“Don't assume that you don't qualify if you haven't had COVID yourself. Go ahead and fill out the application – there may be some circumstances which qualify you,” he said.

He said those involved in land contracts – an agreement in which you purchase a property over time and are awarded a deed once it is paid in full – are not eligible

This is also a one-time program; eligible Hoosiers can only receive the $35,000 one time.

Contact reporter Violet at vcomberwilen@wfyi.org or follow her on Twitter at @ComberWilen.

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