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Texas Homeowner Assistance Policy Manual

1. Texas Homeowner Assistance Overview

1.1 Program Overview

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.

THA 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.

THA provides eligible homeowners with up to $65,000 of assistance for past due mortgages and up to $25,000 of assistance for past due property taxes, insurance, and Homeowner Association (HOA) fees, for a cumulative total of up to $65,000 per household.

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

2. THA Program Types

2.1 Mortgage Reinstatement Program

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, 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.

Reinstatement is available to eligible homeowners who demonstrate an ability to continue their monthly mortgage payments by meeting all three of the following conditions:

  1. Homeowner states that they can afford to continue their monthly mortgage payments;
  2. The ratio of the homeowner’s monthly mortgage payment to monthly household income (sometimes referred to as debt-to-income “HDTI” or “Front-End DTI”) is at or below 55%; and
  3. The delinquent mortgage amount is less than or equal to $65,000.
2.2 Loan Modification with HAF Contribution Program

The Loan Modification with HAF Contribution Program (Modified Mortgage Principal Reduction Program) provides 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.

Eligible homeowners are 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%.

When a homeowner application for Loan Modification with HAF Contribution is initially approved, funds will be guaranteed for a period of 120 days. During this period, the servicer must reach final loan modification terms with the homeowner and accept the guarantee of HAF funds, in order for the funds to be paid. If the servicer does not respond in this time period, the application will be denied.

If a homeowner does not qualify for the Reinstatement Program or the Loan Modification with State Contribution Program, then the homeowner’s application will be denied. The homeowner is encouraged to contact their loan servicer or housing counselor to discuss available options.

2.3 Property Charge Program

The Property Charge Program provides up to $25,000 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) insurance premiums, and (3) 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). Past due property charges for years prior to 2016 are not eligible for assistance. Delinquencies must be brought current by program assistance or resolved concurrently with the program providing assistance.

Funds may also be used to pay property charges coming due in the 90 days following program approval.

3. Qualifying Criteria

3.1 General Eligibility Requirements
  • 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. 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.
  • Property Address in Texas.
  • Primary Residence / Occupancy.
    • To be eligible for this program, homeowners must be the primary resident and occupant of the property. Second homes, vacation homes, rental properties, and vacant properties are not eligible.
  • 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
3.2 Mortgage Program Eligibility
  • Delinquency.
    • Homeowner must be delinquent on their mortgage.
  • Ability to Continue Monthly Mortgage Payments.
    • Homeowner must demonstrate an ability to continue monthly mortgage payments by demonstrating a monthly mortgage payment-to-monthly household income (sometimes referred to as debt-to-income “HDTI” or “Front-End DTI”) at or below 90% for the Loan Modification with HAF Contribution Program and 55% for the Reinstatement Program. Please see Sections 3.3 and 3.4 for details on mortgage program eligibility.
  • 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
    • 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)
  • 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.
3.3 Eligibility for Mortgage Reinstatement

The homeowner’s ability to continue regular mortgage payments determines whether the homeowner is eligible for Reinstatement.

Reinstatement is available to eligible homeowners who meet all three conditions:

  1. Homeowner states that they can afford to continue their monthly mortgage payments;
  2. The ratio of the homeowner’s monthly mortgage payment to monthly household income (sometimes referred to as “HDTI” or “Front-End DTI”) is at or below 55%; and
  3. The delinquent mortgage amount is less than or equal to $65,000.
3.4 Eligibility for Loan Modification with HAF Contribution Program

Eligible homeowners are referred to the Loan Modification with HAF Contribution Program where (i) the homeowner does not meet all three conditions for Reinstatement, (ii) the homeowner’s mortgage servicer is a participating traditional mortgage servicer, and (iii) the homeowner’s HDTI does not exceed 90%.

When a homeowner application for Loan Modification with HAF Contribution is initially approved, funds will be guaranteed for a period of 120 days. During this period, the servicer must reach final loan modification terms with the homeowner and accept the guarantee of HAF funds in order for the funds to be paid. If the servicer does not respond in this time period, the application will be denied.

If a homeowner does not qualify for either the Reinstatement Program or the Loan Modification with HAF Contribution Program, then the homeowner’s application will be denied. The homeowner is encouraged to contact their loan servicer or housing counselor to discuss available options.

3.5 Property Charge Default Resolution Program Eligibility

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
  • Insurance: homeowner’s, mortgage, hazard, flood, and wind premiums
  • HOA fees and liens, condominium fees and liens, cooperative maintenance, or common charges

4. Document Requirements

4.1 Overview
  • 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.
  • Attestation of Truthfulness.
    • Using the application form.
  • Third Party Authorization.
    • Using the application form.

5. Payment Calculations

5.1 Mortgage Reinstatement

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.

5.2 Loan Modification with HAF Contribution

Loan modification with HAF Contribution payment amounts are up to $65,000 per household.

5.3 Property Charges

Eligible Property Charges will be calculated for payment according to the following rules:

  • Cap.
    • The maximum amount of Property Charges assistance per household is $25,000.
  • Delinquent Balance.
    • Property charge delinquencies will be paid in full up to the cap.
  • Charges Coming Due in 90 Days (Current Balance).
    • Funds may also be used to pay property charges coming due in the 90 days following program approval. If a homeowner submits a delinquent property charge statement together with a current property charge statement with a due date that is within the next 90 days, then that current property charge statement will be approved for payment if funds remain within the homeowner’s $25,000 cap. The entire balance is payable on the current statement if it is coming due within 90 days.
  • Amounts Exceeding Cap.
    • Property charge delinquencies must be brought current by program assistance or resolved concurrently with the program providing assistance. Delinquencies exceeding the $25,000 household cap will be denied, with a message to the homeowner that they can reapply if the balance is reduced below $25,000.
  • Reasonable Legal Fees.
    • Reasonable legal fees to prevent displacement are eligible for payment, subject to the cap of $25,000 per household.

6. Prioritization

6.1 Imminent Foreclosure

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.

6.2 Government Loan & Affordable Housing Portfolios

In accordance with HAF guidance and recognizing that homeowners earning up to 100% of the area median income are overrepresented in portfolios of government-backed and guaranteed mortgages compared to the full market, TDHCA will prioritize assistance to homeowners with FHA, VA, and USDA mortgages and homeowners who have mortgages made with proceeds of mortgage revenue bonds or other mortgage programs that target low- and moderate-income homeowners.

6.3 Persistent Poverty Counties

Homeowners residing in Persistent Poverty Counties will be prioritized (moved to the front of the line) for the first 60 days after full release of the program. Additionally, 15% of the disbursable grant will be set-aside until August 31, 2022 for residents of Persistent Poverty Counties.

Persistent Poverty Counties (PPCs) are counties where 20% or more of the population have lived in poverty over the past 30 years, as measured by the 1990, 2000 and 2019 decennial censuses available from the American Community Survey of the Bureau of the Census.

Residents of PPCs are considered Socially Disadvantaged Individuals under the Treasury guidance.

Persistent Poverty Counties in Texas:

  • Aransas County
  • Bee County
  • Brazos County
  • Brooks County
  • Cameron County
  • Camp County
  • Cochran County
  • Coleman County
  • Crosby County
  • Culberson County
  • Dawson County
  • Deaf Smith County
  • DeWitt County
  • Dimmit County
  • Duval County
  • Edwards County
  • El Paso County
  • Falls County
  • Floyd County
  • Frio County
  • Garza County
  • Hall County
  • Haskell County
  • Hidalgo County
  • Houston County
  • Hudspeth County
  • Jim Hogg County
  • Jim Wells County
  • Karnes County
  • Kinney County
  • Kleberg County
  • Knox County
  • Lamb County
  • LaSalle County
  • Marion County
  • Maverick County
  • McCulloch County
  • Menard County
  • Nacogdoches County
  • Nolan County
  • Pecos County
  • Presidio County
  • Real County
  • Reeves County
  • San Augustine County
  • Starr County
  • Terrell County
  • Terry County
  • Uvalde County
  • Val Verde County
  • Webb County
  • Willacy County
  • Zapata County
  • Zavala County
6.4 AMI

Under TDHCA’s HAF plan, eligible homeowners must have incomes equal to or less than 100% of the area median income (twice the income limit for very low-income families with the relevant household size) or equal to or less than 100% of the median income for the United States, whichever is greater. In addition, TDHCA may consider prioritizing certain homeowner applications for assistance based on their AMI bracket. See HUD HAF income limit lookup tool: https://www.huduser.gov/portal/datasets/haf-il.html.

7. Application Denials Due to Applicant Non-Responsiveness

7.1 Denials Overview

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 21 days, including at least one phone call, prior to denying the application. If denied, the homeowner may later submit a new application.

8. Appeals

8.1 Appeals Overview

Applicants may submit an appeal within 30 days of the date that the application is denied.

An appeal must be accompanied by a clearly stated appeal reason, with additional facts or evidence to justify why the homeowner believes there was an error with the denial.

When an appeal is received, the case review team will re-review the application with a focus on the stated appeal reason. The reviewer will determine whether the appeal will be granted or denied.

There is no opportunity for a second or subsequent appeal.