As states reopened their economies in 2021 after the pandemic's worst months, homeowners who had fallen behind on mortgage payments, property taxes, and utility bills during the downturn gained access to a major new source of federal relief. The Homeowner Assistance Fund, or HAF, authorized under the American Rescue Plan Act, provided nearly ten billion dollars to support homeowners facing financial hardship tied to COVID-19.

The Federal Framework

Congress created the Homeowner Assistance Fund through Section 3206 of the American Rescue Plan Act, signed into law on March 11, 2021. The law appropriated nine billion nine hundred sixty-one million dollars to the U.S. Department of the Treasury, which in turn distributed the funds to state housing finance agencies, the District of Columbia, U.S. territories, tribes, and tribally designated housing entities.

Each state received an allocation based on a formula that considered pandemic-era unemployment and mortgage delinquency. Large states such as California, Texas, Florida, and New York received hundreds of millions of dollars. New York alone received roughly five hundred thirty-nine million dollars, the largest state allocation.

What the Funds Could Pay For

HAF was intentionally flexible. Treasury guidance allowed state programs to use funds for a broad set of eligible housing expenses including:

Past-due mortgage principal and interest payments
Property taxes
Homeowner insurance premiums
Flood and hazard insurance
Homeowners association fees
Mortgage insurance premiums
Utility bills including electricity, gas, water, wastewater, and home energy
Internet service
Certain home repairs needed to preserve habitability

The breadth of eligible expenses reflected lessons from the foreclosure crisis of 2008 and 2009, when narrower mortgage-only programs missed homeowners whose difficulties stemmed from property taxes, utilities, or other housing costs.

State Program Design

States designed their own HAF programs within the Treasury framework. A state typically had to submit a plan outlining eligibility criteria, targeted populations, types of assistance, and outreach strategy. Treasury reviewed and approved each plan before releasing funds.

Most states prioritized lower-income homeowners, generally those earning at or below one hundred percent of area median income or one hundred fifty percent of state median income. Programs also gave priority to socially disadvantaged individuals as defined by the Small Business Administration and to homeowners with specific housing situations such as those facing imminent foreclosure.

States opened their application portals throughout 2021 and 2022 as program designs were finalized and operational systems built. New York launched its portal in early 2022. California's KYHL HAF program opened in late 2021. Ohio, Florida, Arkansas, Michigan, and others followed similar timelines.

Who Got Help

Through June 2024, HAF-funded programs had assisted more than five hundred forty-nine thousand homeowners nationwide. That includes homeowners helped with past-due mortgage payments that prevented foreclosure, utility arrears that prevented service shutoffs, and property tax arrears that prevented tax lien sales.

The program reached a substantial share of homeowners who would otherwise have lost their homes. Mortgage delinquency and foreclosure rates, which had spiked in 2020, fell back to historically low levels in subsequent years, partly because of HAF, partly because of mortgage forbearance programs authorized by the CARES Act, and partly because of the unusual strength of housing markets, which let struggling owners sell at a profit rather than face foreclosure.

Application Process

Each state ran its own application process. Common steps included verifying income, documenting a pandemic-related hardship, providing mortgage statements or utility bills showing amounts owed, and identifying the servicer or utility that would receive payment.

Typical processing time ranged from a few weeks to several months, depending on the state and the complexity of the application. Some states contracted with third-party administrators and built online portals that allowed most applicants to apply and track status without visiting an office. Others relied on phone-based intake or partnered with housing counseling agencies to reach homeowners who needed help with the application itself.

Results by State

States varied in how quickly they put dollars out and how many homeowners they reached. Some exhausted their allocations well before Treasury's program deadlines, while others took longer to ramp up and then had to work aggressively to spend remaining funds before they expired. Treasury periodically rebalanced allocations, reclaiming unused funds from slower-moving states and redirecting them to states with strong demand.

By 2024 and 2025, most state programs had either closed or were winding down. Some states had helped tens of thousands of homeowners, while others reached smaller but still meaningful populations. Across the system, HAF represented one of the largest and most successful homeowner relief efforts in modern federal policy.

What Remains

With HAF largely spent, homeowners still struggling with mortgage delinquency have fewer dedicated resources available. Federal loss mitigation programs for Fannie Mae, Freddie Mac, FHA, VA, and USDA loans remain in place and provide meaningful pathways to modify loans or set up repayment plans. Nonprofit housing counseling agencies approved by HUD continue to offer free counseling on foreclosure prevention.

Several states have begun to integrate lessons from HAF into ongoing homeowner assistance programs, preserving some of the operational capacity built during the pandemic even as the specific HAF funding expires. Homeowners facing mortgage trouble should contact their servicer early and seek help from a HUD-approved housing counselor to understand the options that remain.

Lessons Learned

HAF demonstrated that federal and state governments can deliver meaningful housing help at scale when the tools and funding align. The program's success came from a mix of strong federal guidance, flexible state design, online application systems, and significant investment in outreach to at-risk homeowners. Those same elements continue to inform housing policy as future emergencies and ongoing affordability challenges demand continued attention.

State Homeowner Assistance Funds Open as Economy Reopens