PA’s Mortgage Aid, Currently on Hold Due to a Backlog, is Scheduled to Reopen in March
The Pennsylvania mortgage relief initiative, designed to aid homeowners in recovering from pandemic-induced financial setbacks, is set to reopen in March following a closure of over a year. The hiatus aimed to address a backlog of applications and internal challenges faced by the program. With an estimated $46 million in remaining funds, approximately 3,350 new applicants can benefit, according to insights from the Pennsylvania Housing Finance Agency (PHFA).
Scott Elliott, PHFA‘s spokesperson, emphasized the positive news of the program’s revival for new applicants. Rachel Labush, an attorney at Community Legal Services in Philadelphia, urged homeowners facing foreclosure or potential property sale due to back taxes to highlight their situations during the application process, as the program prioritizes such cases.
After the state took control from the initially contracted company last spring, applicants with pending requests had to transition to a new registration system to receive aid. This process had a deadline of February 23 for completion; otherwise, applications would be withdrawn. The reopening allows those who missed the deadline to reapply but without priority over other applicants.
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The program, initiated in January 2022 with $350 million in federal funding, faced challenges early on. A January 2023 investigation revealed difficulties in obtaining necessary information from mortgage companies, resulting in prolonged waits for homeowners uncertain about receiving assistance. Delays led to utility shut-offs and credit score drops for some applicants. Complaints included program workers ceasing communication with homeowners.
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In response, the program halted new applications in February, terminated its contract with the initial service provider, and assumed control. However, the transition encountered delays, creating additional problems. Thousands of homeowners had to register in a new system, causing a slowdown in funds distribution. Some experienced abrupt halts in mortgage payments previously covered by the program.
Despite these challenges, PHFA has progressively disbursed more funds and re-registered applicants. As of February 1, about 6,100 homeowners who applied before the transition hadn’t registered in the new system. Nationally, nearly half of the states have closed or temporarily halted homeowner assistance programs.
Pennsylvania’s program, as of February 1, has disbursed nearly $200 million to around 15,200 households. This information is publicly available, and the report was provided by Spotlight PA, an independent, nonpartisan, nonprofit newsroom focusing on investigative journalism in Pennsylvania.
