To alleviate some of the economic stressors brought on by the COVID-19 pandemic, federal policymakers have enacted measures to protect struggling homeowners and help them stay in their homes, but these policies are scheduled to sunset soon. Ongoing economic improvement and strong home price appreciation should limit foreclosures nationwide, but some homeowners may still have to sell their homes, while others will face significant risk of foreclosure.
The Homeowner Assistance Fund (HAF), which received nearly $10 billion under the American Rescue Plan Act, offers financial relief to homeowners in need. We created new estimates that use economic and housing market conditions to predict where owners may face the greatest risk of foreclosure to help policymakers better target HAF dollars.
Under the HAF, states that receive funding must develop a plan to identify and assist eligible at-risk homeowners, including those with past-due principal, interest, tax, and insurance payments. Homeowners can qualify for assistance if they have experienced financial hardship after January 21, 2020, and have incomes up to 150 percent of the area median income (AMI) or 150 percent of the US median income, whichever is greater. Consideration is also given to delinquent owners who fall into “socially disadvantaged” groups, including people who have been subjected to racial or ethnic prejudice or cultural bias within American society.
We’ve created a dataset that includes homeowners’ demographic and income characteristics and that assesses foreclosure risk in counties across the country. We’ve also explored data for Maryland, Ohio, and New Mexico as examples to show how policymakers could use these data to understand homeowners’ needs.
Our dataset provides the following information for counties in every state:
- number of homeowners with incomes below 100 percent of the AMI, broken out by all homeowners and those with an active mortgage (2019 American Community Survey data, five-year estimates)
- number of homeowners with incomes below 150 percent of the AMI, broken out by all homeowners and those with an active mortgage (2019 American Community Survey data, five-year estimates)
- number of homeowners of color with incomes between 100 and 150 percent of the AMI (2019 American Community Survey data, five-year estimates)
- median monthly housing costs and the share of homeowners who are cost burdened, defined as those spending at least 30 percent of annual income on housing (2019 American Community Survey data, five-year estimates)
- share of all homeowners, by race or ethnicity (2019 American Community Survey data, five-year estimates)
- unemployment rate (Bureau of Labor Statistics data)
- home price growth as measured by home price changes over the past five years (Urban Institute data)
- a predictive foreclosure rate showing foreclosures as a share of total homeowners, based on economic and housing market conditions (Urban Institute data)
With these data, state policymakers can better target HAF dollars to their residents’ needs.