As part of the American Rescue Plan Act, signed into law on March 11, 2021, the Treasury created the Homeowner Assistance Fund (HAF), which allocates $498 million of funding to Tribes or Tribal housing entities with a fund utilization deadline of September 30, 2026.

The objectives of the HAF program are to prevent mortgage delinquencies, loss of home energy/utilities, and displacement of homeowners. Still, HAF comes with a large volume of complexity and challenges for the participants administering the programs.

What Tribes Need to Know

In order to receive their funding, Tribes are required to complete and submit a Notice of Funds Request prior to September 30, 2021, through the Treasury’s electronic portal – failure to submit this will result in the funding being lost and reallocated. Funding allocations to each individual Tribe and Tribal housing entity will be determined after a Tribal consultation period is completed. In addition to the Notice of Funds Request, a financial assistance agreement and a payment information form are also required to be submitted on the portal.  After this, each Tribe or Tribal housing entity will receive 10% of their funding allocation.

The next step is for Tribes or Tribal Housing entities to submit a HAF Plan, which is required to be approved by the Treasury. Entities receiving less than $5 million can utilize a streamlined template from the Treasury instead of submitting a HAF plan. There are ten categories of eligible/qualified expenses (such as mortgage payment assistance, utility costs, insurance, etc.) all with the objective of preventing mortgage delinquencies, loss of home energy, and displacements of homeowners (see Treasury Guidance for details).

The Treasury requires each Tribe and Tribal housing entity’s HAF plan address the following areas:

  • Homeowner Needs and Engagement
    • Including a data-driven assessment of homeowner needs and evidence of public participation and community engagement
  • Program Design
    • Including program descriptions, methods for targeting funds to homeowners earning less than 100% of AMI, and best practices and coordination with other HAF participants
  • Performance Goals
    • All plans must have goals for each program by targeted population
  • Readiness
    • including staffing and systems, contracts and partnerships, and existing and pilot programs
  • Budget
    • using the Treasury’s template

If a Tribe or Tribal housing entity cannot provide the required information in a HAF plan, the Treasury will accept alternative information. If a Tribe’s population is predominantly socially disadvantaged (defined on the Treasury’s website), their HAF Plan may be tailored to reflect the limited effort needed to target the program to these individuals.

Once HAF Plans are fully approved, each Tribe or Tribal housing entity will be required to submit quarterly reports and an annual report which will include financial and other data. However, there is further guidance expected from the Treasury on the full extent of the reporting requirements.

What Applicants Need to Know

It is important for potential applicants to know who qualifies for assistance, how to obtain assistance, and the tax implications for assistance received.

  • Who Qualifies for Assistance
    • Beneficiaries of this assistance are homeowners who have experienced financial hardship after January 21, 2020, and have less than 150% of the area median income. Note that for individual tenants, assistance may be available from the Emergency Rental Assistance Program.
  • How to Obtain Assistance
    • At this stage, this question cannot be clearly answered as programs have not yet been announced. However, we can advise potential applicants to pay close attention to announcements made by Tribes and Tribal housing entities, in addition to reviewing their websites for information. From our experience, it is likely there would be an application to complete (online or via paper copies) which will then be reviewed before payments are made to qualifying applicants (some programs will likely provide support to assist applicants that are having difficulty completing the application). Applicants will be required to attest that they experienced financial hardship and describe the nature of the hardship. Applicants may also be required to verify their income but the method of verification could vary depending on the specific policies each Tribe or Tribal housing entity has set for their program. Some Tribes or Tribal housing entities may allow applicants to provide waivers in place of documentation that cannot be located, but these will also depend on the specific policies set for a program.
  • Tax Implications of Assistance
    • Fortunately for applicants, for anyone who receives HAF mortgage or utility assistance (either paid directly to the mortgage lender/utility company or to the applicant for payment to the mortgage lender/utility company), the assistance received is not taxable to the applicant.

Our team of governmental professionals is highly attuned to the intricacies of the HAF program, and we are experienced in overcoming the challenges of implementing new, complex assistance programs. If you are associated with a Tribe or Tribal housing entity and have questions on the HAF program, feel free to contact our governmental industry line leadership team.