Even during the last recession, when the number of foreclosures rivaled the Great Depression, there was no government program that actually paid a homeowner’s mortgage in New Hampshire. But the state is getting at least $50 million to do just that as part of the $1.9 trillion American Rescue Plan.

Not much else is known about the $9.961 billion Homeowners Assistance Program, not even by the agency that is going to run it, the New Hampshire Housing Finance Authority. The regulations are not out yet, and they don’t seem to be on top of the administration’s priority list because there really isn’t a major problem right now.

There were 11 foreclosures in New Hampshire in February, according to RealtyTrac — over 70% less than a year ago. In Hillsborough County, the foreclosure rate is one in more than 20,000 properties.

Nor are a lot of Granite Staters behind on their mortgage — as of September 2020, 0.7% were more than 30 days late on their payment, according to the Consumer Financial Protection Bureau. That’s similar to the national figure of 0.8%.

What’s going on? Two things. Foreclosures were outright banned in New Hampshire and in many other states when the recession started in March 2020. But that doesn’t explain the lack of delinquencies, nor does it explain why there wasn’t a rush to foreclose once the ban was lifted.

One reason could be all the money pumped into the economy, including the extra $600, then $300, in unemployment assistance that went even to independent contractors, the Paycheck Protection Program loans that bailed out businesses and stimulus check to individuals.

But there is another reason as well: forbearance. The CARES Act required that federally backed mortgages — 70% of all mortgages — offer it, and many lenders with private mortgages did so as well.

Banks worked out arrangements with homeowners that either deferred payment to the end of the mortgage or at the end of the forbearance ban, or accepted interest-only payments. So that meant no foreclosures or delinquencies, but it also meant that lenders were not getting paid in full.

“It just masks the problem,” explained Dean J. Christon, executive director of the NHHFA. “We really don’t know what would have happened, what will happen, if those tools are not in place. It’s impossible to answer.”

Nationally, there are an estimated 2.5 million loans in forbearance plans, according to a Mortgage Bankers Association survey, — just over 5% — and four-fifth of those have had their forbearance extended, indicating that nearly one out of 20 homeowners might owe a lot of money.

But the number is coming down. The MBA doesn’t offer a state-by-state breakdown, but “I can tell you most bank customers are doing quite well,” said NH Bankers Association President Kristy Merrill. “By and large, people seem to be catching up. There are not a lot of requests for extensions for forbearance.”

While the federal government has not yet offered guidelines for the program, the legislation itself does offer a few parameters. The money will help homeowners in need pay overdue mortgage bills, taxes, insurance, utility and internet bills, and homeowner association fees. States will have to use 60% of the funds to assist homeowners earning no more than 100% of the median income.

It’s still not known whether the money goes directly to homeowner, lender or utility, although “the assumption in the industry is that the money will go to the servicer, so the government makes sure it is used for the purpose intended,” said Christon.

The law requires at least $50 million go to each state, but there is a funding formula, so there is a small chance that New Hampshire might even get more. The law states that it will fund homes up to four units, but doesn’t explicitly say that the borrower has to live there (though it is implied in the language and the title of the program). It doesn’t define median income and whether it’s for the person on the deed or the full household. (In New Hampshire the household median is about $75,000.)

Christon thinks that some homeowners coming out of forbearance will use the program, but he has no idea how many.

“This program will be available just in case,” said Christon.

“No one wants to see a large number of foreclosures.”

Renter assistance

Homeowner assistance might be seen as an offshoot of the Emergency Rental Assistance Program, part of the stimulus package passed in December, which allocated $200 million to the state.

Community Action Programs have been helping tenants with rents for years, but never on this scale. The state, using $20 million in CARES Act funds, created its own program with the CAPs last July, but they were only able to spend three-quarters of the money before the program ended in December.

The Emergency Rental Assistance Program potentially provides more money per tenant — up to a year of rent — but even tenant advocates are not sure whether the state will be able to use it all.

As with foreclosures, evictions have gone down during the pandemic — first, due to the governor’s emergency order which ended in July, and then because of a less stringent Centers for Disease Control moratorium, which has been extended to the end of June. The latest extension — which President Biden issued at the end of March — also gave the law some teeth, with both the Federal Trade Commission and the Consumer Financial Protection Bureau given enforcement powers.

Two days before the state launched the rental assistance program, the American Rescue Plan nearly doubled its funding, meaning the state will get another $152 million. Not all that money has to go to rent, since the law allows a tenth to be spent on administration, and the money can also go for other tenant needs like utilities and internet services.

Under this program, the money goes directly to the landlord or service provider, not the tenant. Theoretically, the landlord can apply on behalf of the tenant with the tenant’s signature, but the online application process can make that difficult, said Nick Norman, government affairs director for the Apartment Association of New Hampshire.

“It’s more you have to sit down together at the computer,” he said and complained that some tenants don’t cooperate.

Still, he said, “I’m all over this program” and most tenants are “delighted” when they learn about the assistance.

He said 21 of his 38 tenants who are eligible have applied for assistance so far, and Norman said his organization is “heavily pushing” other landlords to get in touch with tenants to get them to apply.

In less than two weeks 2,700 applications were submitted, said Christon. At that point the program helped 75 tenants with $338,000 in assistance, with another $950,000 in payments being processed.

So far, tenant advocates are pleased with the new program, which is more flexible when it comes to documentation than the state-run one. There are some federal income requirements (80% of median income), but most tenants can meet them.

The program seems to be better advertised than previously,” said Elliot Berry, managing attorney and Housing Project director at New Hampshire Legal Assistance. “Every agency I know is trying hard to get out the word, and landlords are very proactive,” Berry said.

“I feel very good about how the program is designed,” added Aron DiBacco, a community organizer with the Granite State Organizing Project. “I hope it is being implemented in the same spirit.”

— BOB SANDERS