(The Center Square) – The Iowa Finance Authority has so far approved about 1,000 applications received from residents through its Iowa Homeowner Foreclosure Assistance Program, officials said on Thursday.
The total disbursement of $220,000 so far includes the approval of 126 of 513 applications residents submitted through the program since it reopened March 29, Iowa Finance Authority Communications Director Ashley Jared told The Center Square in an email. The agency’s disbursements in 2020 assisted more than 800 households to avoid foreclosure.
“The Governor allocated approximately $2 million in CARES Act funds to keep this program available to homeowners,” Jared said. “It will remain available until the funds are exhausted or the new Federal Housing Assistance Fund Program opens for applications.”
To be eligible, homeowners need to be at risk of foreclosure due to a COVID-19 related loss of income that occurred on or since March 13, 2020. They must have household income no greater than 80% of the area median income. Eligible households can receive mortgage assistance of up to four months or $3,600, beginning with the April 1, 2020, mortgage payment.
Government-based mortgages, which were not eligible for assistance when the agency reopened, are now included, Jared said.
“We’ve since opened our eligibility to include this mortgage type and are taking a second look at those applications now, so this number of households assisted through the program is expected to climb in the coming weeks,” Jared said.
The federal American Rescue Plan Act of 2021 has allocated an additional minimum of $50 million to Iowa through the Homeowner Assistance Fund to help prevent homeowner mortgage delinquencies, defaults, foreclosures, loss of utility or energy services and displacements of homeowners experiencing financial hardship after Jan. 21, 2020, according to the U.S. Department of the Treasury.
Jared said the agency is currently working on the development of the program. Following public input sessions, the Iowa Finance Authority intends to submit a proposed plan to the U.S. Department of the Treasury “for approval no later than August 30.” The program would launch in fall 2021, pending the Treasury’s approval.
The Iowa Association of Realtors reported in its May monthly indicators the median sales price for a single-family detached home in Iowa increased 7.3% from May 2020 ($182,750) to May 2021 ($196,000). The inventory of single-family detached homes for sale decreased 30.2% over that time period.
“With such limited supply of existing homes to purchase, all eyes are on home builders to provide a much-needed boost of inventory to the market to help meet buyer demand,” the report said. “However, increasing material and labor costs, along with supply chain challenges, have contributed to significantly higher construction costs, with builders passing these costs on to homebuyers. And while the warmer temperatures, rising sales prices, and the reopening of the economy may draw more sellers to the market, historically low levels of homes for sale are likely to continue for some time.”