Pennsylvania's Foreclosure Prevention Program Draws Sharp Criticism From Housing Advocates

The Program and the Complaint

The Pennsylvania Housing Finance Agency (PHFA) administers the Pennsylvania Homeowner Assistance Fund (PAHAF), which was seeded with $350 million in federal American Rescue Plan money to help homeowners cure pandemic-era mortgage arrears. Individual grants run up to $50,000 per household and are paid directly to mortgage servicers and utility providers.

On paper, PAHAF looks like a lifeline. In practice, housing advocates in 2023 told reporters the program had become a "nightmare" for the people it was supposed to save.

The Numbers Behind the Criticism

As of mid-2023, 24,633 Pennsylvania homeowners had applied for PAHAF grants. Of those, 15,878 were still waiting for their applications to clear, according to coverage by WHYY and 90.5 WESA. Applicants were routinely spending 45 to 120 days between submitting a complete application and seeing any payment go out to their lender.

For homeowners already in or near foreclosure, those timelines were often too long to matter. Several counties in Pennsylvania permit sheriff's sales to move forward on schedules that run shorter than 120 days once a lender files for foreclosure, meaning a homeowner could lose the property while their PAHAF application sat in review.

Why Advocates Say the Program Stalled

PHFA earlier in 2023 moved the program in-house after problems with its original third-party vendor, bringing processing, call center work, and case management under the agency's direct control. The agency hired additional staff, deployed a new software system called Neighborly, and launched re-registration campaigns to move applicants into the upgraded platform.

Advocates credit the agency for acknowledging the delays and adding capacity, but argue the program's core problems are structural: complex documentation requirements, slow coordination with mortgage servicers, and a lack of bridge protections for applicants who file before foreclosure but receive funding after sheriff's sale.

What Homeowners Can Do

PAHAF eventually announced that forward mortgage assistance would not be approved for any months past June 2025, regardless of approval status, a cutoff driven by the fact that the federal funding pool is running down. The maximum combined assistance remains at $50,000 per household.

Homeowners with applications in progress can contact PAHAF at askpahaf@pahaf.org or call 800-342-2397 to check status. Advocates continue to recommend that any homeowner in foreclosure also pursue loss mitigation directly with the mortgage servicer, request a mediation through the county Common Pleas court where available, and connect with a HUD-approved housing counselor for free help navigating the options.

A capitol rally organized by the Philadelphia Unemployment Project highlighted specific cases of homeowners who were denied or delayed, and called on PHFA and the state legislature to push harder on servicer coordination and to post more detailed program data publicly.