Texas Homeowner Assistance Program – Policy Manual

The Texas Homeowners Assistance (TXHAF) Program provides financial assistance to qualified Texas homeowners who have fallen behind on their mortgage and related expenses due to the COVID-19 pandemic.

TXHAF is administered by the Texas Department of Housing and Community Affairs (TDHCA) with funding provided by the Homeowner Assistance Fund (HAF) under the American Rescue Plan Act of 2021.

TXHAF provides eligible homeowners with up to $65,000 of assistance for past due mortgages; past due property taxes including payments to property tax lenders, insurance, Homeowner Association (HOA) fees; and up to $10,000 for utilities, not to exceed a cumulative total of up to $65,000 per household. There are no longer any caps on property charges; and there are no subcaps on specific categories of property charges. From the program opening until May 12, 2023, a cap on property charges of $25,000 was in place. Caps for each eligible expense are reflected below but in total may not exceed $65,000.

TOTAL CAP ACROSS ALL ACTIVITIES:  $65,000
SUB CAP FOR UTILITIES:  $10,000

Assistance is structured as a non-recourse grant to the homeowner. Payments are made directly to the mortgage servicer, property charge payee, or utility provider.

As of March 5, 2024, TXHAF will no longer assist with case shortages.

The Mortgage Reinstatement Program provides up to $65,000 per qualified household to eliminate or reduce past-due payments and other delinquent amounts, including payments under a forbearance plan or having been deferred, on forward mortgages, reverse mortgages, loans secured by manufactured homes, or contracts for deed.

HAF funds may be used to bring the account fully current, with no remaining delinquent amounts, and to repay amounts advanced by the lender or servicer on the borrower’s behalf to protect the lien position for property charges, including property taxes, mortgage insurance premiums, hazard insurance premiums, flood or wind insurance premiums, ground rents, condominium fees, cooperative maintenance fees, planned unit development fees, homeowners’ association fees, or utilities. The payment may also include any reasonably required legal fees. HAF funds may be used to pay for deferrals so long as they have been requested by the household or their servicer, the deferral happened between Jan 21, 2020 and April 10, 2023, and the deferred amounts are otherwise eligible.

Reinstatement is available to eligible homeowners with a delinquent mortgage amount less than or equal to $65,000 and meet the following conditions:

Partial Reinstatement

TXHAF will no longer send Q (requote) records to a loan servicer. TXHAF will use the most current CDF total past due and reinstatement good through date for a partial reinstatement if the servicer agrees to accept the payment for traditional servicers.

TXHAF will use the most current mortgage statement and reinstatement good through date for a partial reinstatement if the servicer agrees to accept the payment for non-traditional servicers.

If an overage exists, the overage may be applied to the borrower’s loan.

HAF offered a Monthly Assistance Program that provided full monthly payment assistance to homeowners who are past due on their mortgage and unable to make full mortgage payments due to a continuing financial hardship associated with the Coronavirus pandemic. The funds allowed a qualified homeowner up to three (3) months of monthly payment assistance, in addition to Reinstatement assistance, for a total amount not to exceed $65,000 of assistance per household. The Monthly Payment Assistance Program was discontinued on February 2, 2024, as allocated program funds were depleted.

The Loan Modification with HAF Contribution Program (Modified Mortgage Principal Reduction Program) provided up to $65,000 per qualified household for loss mitigation measures intended to result in a permanently sustainable monthly payment for borrowers unable to meet scheduled payment requirements due to a financial hardship associated with the Coronavirus pandemic. HAF funds may be used to effect principal reductions, reduce the rate of interest, recast payment terms, repay funds advanced by the servicer on the borrower’s behalf, and as otherwise appropriate to ensure such assistance, when leveraged with other available loss mitigation options, results in a sustainable payment amount for the borrower.

From the program opening until August 23, 2022, eligible homeowners were referred to the Loan Modification with HAF Contribution Program where (i) the homeowner does not meet all three qualifications for Reinstatement, (ii) the homeowner’s mortgage servicer is participating, and (iii) the homeowner’s HDTI does not exceed 90%.

During the Loan Modification with HAF Contribution Program, upon initial approval of an application, funds were guaranteed as a contribution to loan modification, contingent upon the servicer and homeowner reaching final loan modification terms and the servicer accepting the guarantee of funds.

The lien extinguishment and recasting programs were offered as an extension of the Loan Modification with HAF Contribution Program.

1. Lien Extinguishment. If an application is being reviewed under the Loan Modification with HAF Contribution program and the loan servicer confirms that the payoff amount of the loan is less than $40,000, the loan may instead be considered for lien extinguishment. Lien extinguishment provides HAF benefits to payoff and therefore extinguish a first and/or subordinate lien. Lien extinguishment is not available if it appears that the full payoff of the mortgage loan balance will trigger full payment of a deferred or balloon balance that the homeowner is not able to pay.

Beginning on August 23, 2022, applications in the review cycle for Loan Modification with HAF Contribution (including cases where CDF-G records have been sent to the servicer) will instead be considered for the Reinstatement plus Monthly Payment Assistance Programs.

The Property Charge Program provides up to the total program cap of $65,000 per eligible household to resolve any property charge default that threatens a homeowner’s ability to sustain property ownership, whether concurrently with other loss mitigation options offered by the loan servicer or in conjunction with other assistance programs.

HAF assistance may be used to pay past-due (1) property taxes, (2) HOA fees, condominium fees, cooperative maintenance or common charges that threaten sustained ownership of the property (such as legal services that support measures to prevent displacement), and effective May 24, 2023 (3) Property Tax Lenders for eligible property taxes having been paid.

Past due property charges for years prior to 2016 are not eligible for assistance. The full payment will be resolved including both penalty and non-penalty balances. Delinquencies must be brought current by program assistance or resolved concurrently with the program providing assistance.

Funds may only be used to pay delinquent property charges and will not cover charges coming due in the 90 days following program approval.

The Utility Payment Assistance program provides funds to resolve delinquent and prospective payments for utility services. Utility payment Assistance will allow payment assistance for homeowner’s utilities, including electric, gas, metered and non-metered propane, water and wastewater.

HAF assistance may be used to pay delinquent amounts in full under circumstances in which a delinquency threatens access to utilities. The provided assistance must bring the homeowner’s account current and may include trash or other embedded expenses. HAF funds may be used to also pay prospective charges for up to the first 90 days (3 months) following approval if the homeowner is unable to make such payments and funds are not provided from other utility assistance programs to cover these amounts.

1. Utility payment assistance is available as a standalone program
2. Utility Payment assistance can be provided if the $65,000 per household limit has not been exceeded after Reinstatement, Monthly Mortgage Payment assistance, Property Charge Default Resolution assistance, HOA, and HOI assistance

Provided utility assistance may not exceed a total of $10,000, however there is no maximum amount for any single monthly utility bill. The maximum assistance amount across all programs is $65,000

• Financial Hardship.
  • To be eligible for this program, Texas homeowners must have experienced, and must self-certify to, a material reduction in income or material increase in living expenses associated with the coronavirus pandemic that has created or increased a risk of mortgage delinquency, mortgage default, or foreclosure, which hardship occurred after January 21, 2020 and before April 10, 2023. The homeowner must describe the nature of the financial hardship.
• Identification.
  • Applicant must provide a form of identification.
• Household Income.
  • Eligible homeowners must have incomes equal to or less than 100% of the area median income (two times the income limit for very low-income families for the relevant household size) or equal to or less than 100% of the median income for the United States, whichever is greater. See https://www.huduser.gov/portal/datasets/haf-il.html. Income for eligibility purposes will include the income of all household members aged 18 and above.
• Income Inclusion.
  • The following income sources are eligible for inclusion in the HH income calculation based on 24 CFR 5.609:
    • Wages and Salaries
    • Overtime
    • Commissions
    • Fees
    • Tips
    • Bonuses
    • Net income from operating a business
    • Interest, dividends, and other net income from real or personal property
    • Withdrawal or cash assets from investments/accounts
    • Payment in lieu of earnings such as unemployment, disability, workers compensation, and severance pay
    • The full amount of periodic payments received from: Social security, annuities, pensions, insurance policies, retirement funds, disability and death benefits
    • Welfare assistance payments, TANF welfare payments. Welfare payments made under the Temporary Assistance to Needy Families (TANF) program are included in annual income only to the extent such payments: i. Qualify as assistance under the TANF program definition at 45 CFR 260.31; and ii. Are not otherwise excluded.
• Income Exclusion.
  • The following income sources are ineligible for inclusion in the HH income calculation based on 24 CFR 5.609:
    • Income from employment of children under the age of 18;
    • Payments received for the care of foster children or foster adults;
    • Lump sum additions to family assets, such as inheritances, insurance payments, capital gain, and settlement for personal or property losses, except as provided in Income Inclusions;
    • Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member;
    • Income of a live-in aide, as defined in 24 CFR 5.403;
    • The full amount of student financial assistance, paid directly to the student or to the educational institution;
    • The special pay to a family member serving in the Armed Forces who is exposed to hostile fire;
    • Amounts received under training programs funded by HUD;
    • Amounts received by a participant in other publicly assisted programs that are specifically for or in reimbursement of out-of-pocket expenses incurred and which are made solely to allow participation in a specific program;
    • Amounts received under a resident service stipend.
    • Incremental earnings and benefits resulting to any family member from participation in qualifying state or local government employment programs and training of a family member as a resident management staff person.
    • Temporary, nonrecurring, or sporadic incomes (including gifts).
    • Reparation payments paid by a foreign government pursuant to claims filed under the law of that government by persons who were persecuted during the Nazi era.
    • Earnings in excess of $480 for each full time student 18 years or older (Excluding the head of household and spouse);
    • Adoption assistance payments in excess of $480 per adopted child;
    • Deferred periodic amounts from supplemental security income and social security benefits that are received in a lump-sum amount or in prospective monthly amounts;
    • Amounts received by the family in the form of refunds or rebates under state and local law for property taxes paid on the dwelling unit;
    • Amounts paid by a state agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home;
    • Amounts specifically excluded by any other federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609© apply; or
    • SNAP, Food Stamps
• Property Address in Texas.
• Primary Residence / Occupancy.
  • To be eligible for this program, homeowners must be the primary resident and occupant of the property. Applicants owning multiple properties, (ex)Second homes, vacation homes, rental properties, and vacant properties are not eligible. If an applicant’s home address is different from their mailing address, an explanation for the variance will be required. Homes on the market or listed for sale are not eligible for assistance.
• Ownership.
  • To be eligible for this program, homeowners must be the owner of the property.
• Owner Type.
  • To be eligible for this program, applicant must be a natural person or a non-incorporated living trust that holds title to the property.
• Eligible Property Types:
  • Single-family properties
  • Condominium units
  • 2- to 4-unit properties where the homeowner is living in one of the units as their primary residence
  • Manufactured homes permanently affixed to real property and taxed as real estate
  • Manufactured homes not permanently affixed to real property

• Delinquency.
  • Homeowner must be delinquent on their mortgage.
• Delinquent Amount.
  • The delinquent amount must be less than $65,000.
• Delinquent Date.
  • The mortgage must have become delinquent on or after January 1, 2019.
• Reverse Mortgages.
  • The homeowner must either be in default due to property charges or have entered a repayment plan to repay such charges.
• Conforming Loan Limit.
  • The original loan balance must be confirmed to be within the conforming loan limits at the time of origination.
• Servicer Payment Requirements.
  • To receive payment, a servicer must either have a Nationwide Multistate Licensing System & Registry (“NMLS”) number or qualify for an exemption under Texas Finance Code, Section 156.202.
• Eligible Mortgage Types.
  • First Mortgages
  • Home Equity Loans (first, second or third foreclosable liens)
  • Reverse Mortgages (Home Equity Conversion Mortgages, Single-Purposes Reverse Mortgages, or Proprietary Reverse Mortgages)
  • Contracts for Deed or Land Contract (if it is a credit transaction secured by a consensual security interest in a dwelling)
  • Second Mortgages
  • Loans Secured by Manufactured Housing (secured by real estate or dwelling)
• Ineligible Mortgage Types:
  • Home Equity Loans that do not include a foreclosable lien
  • Home Equity Line of Credit (HELOC)
  • Mechanic’s Lien
• Bankruptcy.
  • Bankruptcy does not disqualify a homeowner from the program.
• Payments Missed or Reduced During Forbearance.
  • Are eligible if the homeowner is still in forbearance.
• Standalone Partial Claim.
  • Homeowners who have already received a standalone partial claim or loan modification from their servicer are not currently eligible, unless they became delinquent again after that time. At this time, Partial Claims are not eligible but are open for future consideration pending guidance from FHA/HUD.

Homeowner must provide documentation (e.g., a past-due bill) showing that the homeowner is at least one installment payment or 30 days, whichever is smaller, in arrears on one or more property charges, including:

• Property taxes
• Property Tax Lenders for eligible property taxes having been paid
• HOA fees and liens, condominium fees and liens, cooperative maintenance, or common charges

Any household may apply for the Utility Payment Assistance Program – participation in other HAF assistance Programs is not required for a household to be qualified for Utility Payment Assistance. All charges are eligible; homeowner is not required to pay charges.

Beginning on September 29, 2022, eligible homeowners are referred to, or may apply for, the Utility Payment Assistance Program when the following conditions are met:

1. Homeowner is at least one installment payment in arrears on one or more of the following: utilities: electric, gas, propane, water and wastewater.
2. Assistance sufficient to resolve the delinquency is not provided from other utility assistance programs and, without HAF assistance, the homeowner is likely to lose services.
3. Utility bill must be within the last 45 days within application date.

• Homeowner Identity.
  • The homeowner must provide a current or expired form of identification, such as a driver’s license, state identification card, voter registration card, school registration form, library card, passport, student ID, Social Security card, military ID, naturalization certificate, lawful permanent residency card, employment authorization document, or birth certificate.
• Household Income.
  • Applicants must provide supporting documentation of the household income for the last one month for all income sources, such as:
    • Paystubs, W‐2s, or other wage statements
    • IRS Form 1099
    • Tax filings
    • Depository institution statements demonstrating regular income
    • An employer attestation
    • Homeowner attestation
• Primary Residence / Occupancy.
  • The homeowner must provide proof that the property is their primary residence, e.g., a utility bill for the property in the homeowner’s name and address.
• Mortgage Delinquency.
  • The homeowner must provide their mortgage statement or other documentation to substantiate their mortgage is delinquent. This document must reflect the applicant as the owner of the property.
• Property Charge Delinquency.
  • The homeowner must provide documentation such as a past-due bill for each qualified property charge (property tax, insurance, or HOA/condo association fees). This document must reflect the applicant as the owner of the property.
• Utility Bill Delinquency.
  • The homeowner must provide documentation such as a past due bill current within the last 45 days from date of application for each qualified utility for which assistance is being requested. Homeowners requesting utility bill assistance must also provide separate proof that the applicant is the owner of the property.
• Attestation of Truthfulness.
  • Using the application form.
• Third Party Authorization.
  • Using the application form.

Reinstatement payment amounts are equal to the total past due amount that the homeowner owes to the mortgage servicer, up to a maximum amount of $65,000 per household.

The total assistance per household between the Mortgage and Property Charge Programs cannot exceed $65,000 per household.

Effective May 24, 2023, each household may be awarded for multiple requests per activity type so long as:

1. Costs are eligible
2. Household is still income eligible
3. The assistance requests are for different months of assistance, and
4. The total assistance awards for the household cumulatively across multiple requests does not exceed the $65K cap and does not exceed the $10K Utility cap
5. As program funding allows

Eligible Property Charges and Utility Payment Assistance will be calculated for payment according to the following rules:

• Cap.
  • The maximum amount of Property Charges Assistance per household is the total program cap of $65,000 and the maximum amount of Utility Payment Assistance per household is $10,000 (which is included in the $65,000). The total assistance per household between the Mortgage and Property Charge and Utility Payment Assistance Programs cannot exceed $65,000 per household.
• Delinquent Balance.
  • Property charge will be paid in full up to the cap, but will not include any balances coming due that are not yet delinquent.
• Prospective Payments for Utility Payment Assistance.
  • Electricity, Water, Wastewater and Gas. The Alternative Billing Method (ABM) is used to calculate the three months’ prospective Utility Payment Assistance amount for electricity, gas, water and wastewater. ABM determines the average cost per month for each household size and type based on estimated annual consumption amount (kWh, therms, gallons, etc.).
  • Propane. For prospective payments for propane, if the homeowner submits a statement showing the current balance, then the three-month’s prospective payment is calculated based on duplicating that figure.
• Amounts Exceeding Cap.
  • Property charge and utility delinquencies must be brought current by program assistance or resolved concurrently with the program providing assistance. Delinquencies exceeding the $65,000 or $10,000 utility household cap will be denied, with a message to the homeowner that they can reapply if the balance is reduced below the cap.
• Reasonable Legal Fees.
  • Reasonable legal fees to prevent displacement are eligible for payment, subject to the cap of $65,000 and $10,000, respectively, per household.

Effective May 24, 2023, TDHCA applications for assistance are prioritized according to the following priorities:

• Priority 1 = Imminent Foreclosure
• Priority 2 = 1st time applicants who have not received HAF assistance for that category of assistance
• Priority 3 = Homeowners who have received HAF assistance and are applying for a subsequent time

At all times while HAF funds are available, homeowners facing “imminent foreclosure” (a property with a scheduled sale date at the time of application) will be moved to the front of the line regardless of the residence’s geographic location, except that a household applying only for Utility Assistance will not be prioritized based on their mortgage status.

1st time applicants who have not received HAF assistance of any type.

Homeowners who have received HAF assistance and are applying for a subsequent time.

If a homeowner does not submit complete documentation and information in their initial application, the application review team will make at least three attempts to contact the homeowner over 14 days, including at least one phone call, prior to denying the application.

Note that until January 31, 2024, applications were not denied due to loan servicer non-responsiveness. However, as funds become depleted, applications experiencing loan servicer non-responsiveness will be denied after 14 days of non-responsiveness.