NEWARK, N.J. – U.S. Senator Bob Menendez, a senior member of the Senate Banking Committee and ranking member of the subcommittee on housing, said today that he will introduce legislation to protect families from a potential housing, foreclosure and eviction crisis caused by the COVID-19 pandemic and economic fallout with the creation of a new $75 billion Housing Assistance Fund to assist households struggling to make ends meet. Although New Jersey’s foreclosure rate has dropped as the economy has recovered from the Great Recession and Superstorm Sandy, it remains highest in the nation.
“Families all across New Jersey are already facing an incredibly tough and uncertain time as we endure a public health crisis and brace for a worsening economic crisis,” said Sen. Menendez. “This devastating one-two punch has the power to cause a massive wave of foreclosures and evictions throughout our communities. We cannot afford to sit back and wait to act until families are underwater, wiped-out or out on the street. This legislation – which I will introduce as soon as Congress returns to Washington, will give our state the tools we need to keep our families where they belong – in their homes.”
Senator Menendez’s legislation builds upon the successful Hardest Hit Fund (HHF) that was created during the Great Recession and directed federal funds to state housing finance agencies (HFA’s) in order to provide targeted foreclosure prevention assistance. The Housing Assistance Fund would provide new federal resources and new flexibility so that HFAs can use funds to help struggling households stay in their homes while they search for new employment or wait to get back to work. Financial assistance could go toward mortgage payment assistance; utility payments; and other support to prevent eviction, mortgage delinquency or default foreclosure, or loss of utility services.
“Direct federal support, in the form of a Housing Assistance Fund, could be a gamechanger for New Jerseyans, providing our homeowners with much-needed financial relief in the absence of stable income,” said Governor Phil Murphy. “I commend Senator Menendez for his efforts to deliver meaningful aid to New Jersey, as we continue to address an unprecedented surge in unemployment and economic uncertainty as a result of this public health crisis.”
“Preventative measures taken to protect the health of our communities will consequently cause many people, especially lower wage earners, to be unable to pay their rent. NJ tops the nation in foreclosures and it’s also one of the most expensive places for renters. That, combined with the staggering unemployment at this time, puts our most vulnerable residents at risk of falling behind and losing their homes once this pandemic is over. We thank Senators Menendez, Reed and Brown for taking steps to help Americans keep a roof over their heads and we urge Congress to move swiftly on this legislation,” said Staci Berger, President and CEO, Housing and Community Development Network.
“This fund could provide support to thousands of New Jersey homeowners who, through no fault of their own, have lost income as a result of the pandemic,” said Charles Richman, Executive Director, New Jersey Housing and Mortgage Finance Agency. “It will help ensure they can stay safe at home until they can get back to work.”
The bill is being cosponsored by all Democratic members of the Senate Banking Committee, including Senators Sherrod Brown (D-Ohio), Jack Reed (D-R.I.) Jon Tester (D-Mont.), Brian Schatz (D-Hawaii), Doug Jones (D-Ala.), Tina Smith (D-Minn.), Elizabeth Warren (D-Mass.), Kyrsten Sinema (D-Ari.), Mark Warner (D-Va.), Chris Van Hollen (D-Md.), and Catherine Cortez Masto (D-Nev.).
The Coronavirus Aid, Relief, and Economic Security (CARES) Act included $4 billion for homeless assistance funding to help vulnerable populations avoid evictions and minimize the immediate impacts of lost employment, child care, or other unforeseen circumstances related to COVID-19. The CARES Act also grants forbearance and protection against foreclosure to borrowers with loans insured or guaranteed by FHA, VA, or USDA or backed by Fannie Mae and Freddie Mac. The Housing Assistance Fund will ensure that families can remain in their homes long term.