Title: A bill to establish a Homeowner Assistance Fund at the Department of the Treasury.
Policy area: Housing and Community Development

Summary:
This bill provides funds for assistance to homeowners to prevent mortgage defaults, foreclosures, and displacements of individuals and families experiencing financial hardship after January 21, 2020. The Department of the Treasury must disburse the funds to state housing finance agencies, territories, and Indian tribes for the provision of such assistance.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 254 Introduced in Senate (IS)]

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117th CONGRESS
  1st Session
                                 S. 254

   To establish a Homeowner Assistance Fund at the Department of the 
                               Treasury.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            February 4, 2021

Mr. Reed (for himself, Mr. Brown, Mr. Leahy, Mr. Menendez, Ms. Warren, 
 Mr. Van Hollen, Ms. Cortez Masto, Ms. Sinema, Mrs. Murray, Mr. Wyden, 
  Mr. Durbin, Mr. Carper, Mr. Sanders, Mr. Casey, Ms. Klobuchar, Mr. 
Whitehouse, Mr. Merkley, Mrs. Gillibrand, Mr. Blumenthal, Ms. Baldwin, 
   Mr. Kaine, Ms. Duckworth, Mr. Cardin, Mr. Booker, Mr. Tester, Mr. 
   Ossoff, Ms. Smith, Mrs. Shaheen, Ms. Hirono, Mr. Schatz, and Mr. 
    Warner) introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
   To establish a Homeowner Assistance Fund at the Department of the 
                               Treasury.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. HOMEOWNER ASSISTANCE FUND.

    (a) Definitions.--In this section:
            (1) Conforming loan limit.--The term ``conforming loan 
        limit'' means the applicable limitation governing the maximum 
        original principal obligation for a mortgage secured by a 
        single-family residence, a mortgage secured by a 2-family 
        residence, a mortgage secured by a 3-family residence, or a 
        mortgage secured by a 4-family residence, as determined and 
        adjusted annually under section 302(b)(2) of the Federal 
        National Mortgage Association Charter Act (12 U.S.C. 
        1717(b)(2)) and section 305(a)(2) of the Federal Home Loan 
        Mortgage Corporation Act (12 U.S.C. 1454(a)(2)).
            (2) Eligible household.--The term ``eligible household'' 
        means a household whose income does not exceed 150 percent of 
        the area median income for their household size, as determined 
        by the Secretary of Housing and Urban Development.
            (3) Mortgage.--The term ``mortgage'' means a mortgage--
                    (A) that is secured by the principal residence of a 
                borrower; and
                    (B) the unpaid principal balance of which was, at 
                the time of origination, not more than the conforming 
                loan limit.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (5) State.--The term ``State'' means any State of the 
        United States, the District of Columbia, any territory of the 
        United States, the Commonwealth of Puerto Rico, Guam, American 
        Samoa, the Virgin Islands, and the Northern Mariana Islands.
    (b) Establishment of Fund.--There is established at the Department 
of the Treasury a Homeowner Assistance Fund to provide such funds as 
are appropriated in subsection (f) to State housing finance agencies 
and any entity named under subsection (j) for the purpose of preventing 
homeowner mortgage defaults, foreclosures, and displacements of 
individuals and families experiencing financial hardship after January 
21, 2020.
    (c) Allocation of Funds.--
            (1) In general.--The Secretary shall establish such 
        criteria as are necessary to allocate the funds available 
        within the Homeowner Assistance Fund to each State. The 
        Secretary shall allocate such funds among all States taking 
        into consideration the number of unemployment claims within a 
        State relative to the nation-wide number of unemployment 
        claims.
            (2) Small state minimum.--
                    (A) In general.--Each State of the United States, 
                the District of Columbia, and the Commonwealth of 
                Puerto Rico shall receive no less than $250,000,000 for 
                the purposes established in subsection (b).
                    (B) Pro rata adjustments.--The Secretary shall 
                adjust on a pro rata basis the amount of the payments 
                for each State of the United States, the District of 
                Columbia, and the Commonwealth of Puerto Rico under 
                this subsection without regard to this subparagraph to 
                the extent necessary to comply with the requirements of 
                subparagraph (A).
            (3) Territory set-aside.--Notwithstanding any other 
        provision of this section, of the amounts appropriated under 
        subsection (f), the Secretary shall reserve $200,000,000 to be 
        disbursed to Guam, American Samoa, the Virgin Islands, and the 
        Northern Mariana Islands based on each such territory's share 
        of the combined total population of all such territories, as 
        determined by the Secretary. For the purposes of this 
        paragraph, population shall be determined based on the most 
        recent year for which data are available from the United States 
        Census Bureau.
            (4) Tribal set-aside.--The Secretary shall allocate funds 
        to an entity designated under subsection (j) pursuant to the 
        requirements of that subsection.
    (d) Disbursement of Funds.--
            (1) Initial disbursement.--The Secretary shall disburse to 
        the State housing finance agencies and entities designated 
        under subsection (j) not less than \1/2\ of the amount made 
        available pursuant to this section, and in accordance with the 
        allocations established under subsections (c) and (j), not 
        later than 120 days after the date of enactment of this Act. 
        The Secretary or designee shall enter into a contract with each 
        State housing finance agency and each entity designated under 
        subsection (j), which may be amended from time to time, 
        establishing the terms of the use of such funds, in accordance 
        with subsection (e), prior to the disbursement of such funds.
            (2) Second disbursement.--The Secretary shall disburse all 
        funds made available pursuant to this section, and in 
        accordance with the allocations established under subsections 
        (c) and (j), not later than 180 days after the date of 
        enactment of this Act.
    (e) Permissible Uses of Fund.--
            (1) In general.--Funds made available to State housing 
        finance agencies and designated entities under subsection (j) 
        pursuant to this section may be used to assist eligible 
        households for the purposes established under subsection (b), 
        which may include--
                    (A) mortgage payment assistance;
                    (B) financial assistance to allow a borrower to 
                reinstate their mortgage following a period of 
                forbearance;
                    (C) principal reduction;
                    (D) payment assistance for--
                            (i) utilities, including electric, gas, and 
                        water;
                            (ii) internet service, including broadband 
                        internet access service, as defined in section 
                        8.1(b) of title 47, Code of Federal Regulations 
                        (or any successor regulation); and
                            (iii) property taxes;
                    (E) any program established under the Housing 
                Finance Agency Innovation Fund for the Hardest Hit 
                Housing Markets;
                    (F) reimbursement of funds expended by a State or 
                local government during the period beginning on January 
                21, 2020, and ending on the date that the first funds 
                are disbursed by the State under the Homeowner 
                Assistance Fund, for the purpose of providing housing 
                or utility payment assistance to individuals or 
                otherwise providing funds to prevent foreclosure or 
                eviction of a homeowner or tenant or prevent mortgage 
                delinquency or loss of housing or utilities as a 
                response to the coronavirus disease 2019 (COVID-19) 
                pandemic; and
                    (G) any other assistance to prevent eviction, 
                mortgage delinquency or default, foreclosure, or the 
                loss of utility services for an eligible household.
            (2) Administrative expenses.--Not greater than 10 percent 
        of the amount allocated to a State or an entity pursuant to 
        subsections (c) or (j) may be used by a State housing financing 
        agency or an entity for administrative expenses. Any amounts 
        allocated to administrative expenses that are no longer 
        necessary for administrative expenses may be used in accordance 
        with paragraph (1).
    (f) Appropriation.--There is appropriated, out of amounts in the 
Treasury not otherwise appropriated, for the fiscal year ending 
September 30, 2021, to remain available until expended or transferred 
or credited under subsection (h) or subsection (j), $75,000,000,000 to 
the Homeowner Assistance Fund established under subsection (b).
    (g) Use of Housing Finance Agency Innovation Fund for the Hardest 
Hit Housing Markets Funds.--A State housing finance agency may 
reallocate any administrative or programmatic funds it has received as 
an allocation from the Housing Finance Agency Innovation Fund for the 
Hardest Hit Housing Markets created pursuant to section 101(a) of the 
Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211(a)) that 
have not been otherwise allocated or disbursed as of the date of 
enactment of this Act to supplement any administrative or programmatic 
funds received from the Homeowner Assistance Fund. Such reallocated 
funds shall not be considered when allocating resources from the 
Homeowner Assistance Fund using the process established under 
subsection (c) and shall remain available for the uses permitted in 
subsection (e) and under the terms and conditions established by the 
contract with the Secretary created pursuant to subsection (d)(1) and 
the terms of subsection (h).
    (h) Rescission of Funds.--Any funds that have not been allocated by 
a State housing finance agency to provide assistance as described under 
subsection (e) by December 31, 2030, shall be reallocated by the 
Secretary in the following manner:
            (1) 65 percent shall be transferred or credited to the 
        Housing Trust Fund established under section 1338 of the 
        Federal Housing Enterprises Financial Safety and Soundness Act 
        of 1992 (12 U.S.C. 4568).
            (2) 35 percent shall be transferred or credited to the 
        Capital Magnet Fund under section 1339 of the Federal Housing 
        Enterprises Financial Safety and Soundness Act of 1992 (12 
        U.S.C. 4569).
    (i) Reporting Requirements.--The Secretary shall provide public 
reports not less frequently than quarterly regarding the use of funds 
provided by the Homeowner Assistance Fund. Such reports shall include 
the following data by State or entity receiving funds pursuant to 
subsection (j) and by program within each State or entity receiving 
funds pursuant to subsection (j), both for the past quarter and for the 
life of the program--
            (1) the amount of funds allocated;
            (2) the amount of funds disbursed;
            (3) the number of households and individuals assisted;
            (4) the acceptance rate of applicants;
            (5) the average amount of assistance provided per household 
        receiving assistance;
            (6) the average length of assistance provided per household 
        receiving assistance;
            (7) the income ranges of households for each household 
        receiving assistance;
            (8) demographic information about each household receiving 
        assistance, including race, ethnicity, and service member 
        status; and
            (9) the outcome 12 months after the household has received 
        assistance.
    (j) Tribal Set-Aside.--
            (1) Definitions.--In this subsection:
                    (A) Department of hawaiian home lands.--The term 
                ``Department of Hawaiian Home Lands'' has the meaning 
                given the term in section 801 of the Native American 
                Housing Assistance and Self-Determination Act of 1996 
                (42 U.S.C. 4221).
                    (B) Eligible recipient.--The term ``eligible 
                recipient'' means any entity eligible to receive a 
                grant under section 101 of the Native American Housing 
                Assistance and Self-Determination Act of 1996 (25 
                U.S.C. 4111).
            (2) Set-aside.--
                    (A) In general.--Notwithstanding any other 
                provision of this section, of the amounts appropriated 
                under subsection (f), the Secretary shall use 5 percent 
                to make grants to eligible recipients for the purposes 
                described in subsection (e)(1).
                    (B) Native hawaiian set-aside.--Of the funds set 
                aside under subparagraph (A), the Secretary shall use 
                0.3 percent to make grants to the Department of 
                Hawaiian Home Lands for the purposes described in 
                subsection (e)(1).
            (3) Requirements.--
                    (A) Allocation.--Except for the funds set aside 
                under paragraph (2)(B), the Secretary shall allocate 
                the funds set aside under paragraph (2)(A) using the 
                allocation formula described in subpart D of part 1000 
                of title 24, Code of Federal Regulations (or successor 
                regulations).
                    (B) Native hawaiians.--The Secretary shall use the 
                funds made available under paragraph (2)(B) in 
                accordance with part 1006 of title 24, Code of Federal 
                Regulations (or successor regulations).
            (4) Rescission.--The Secretary shall transfer any funds 
        made available under paragraph (2) that have not been allocated 
        by an eligible recipient or the Department of Hawaiian Home 
        Lands, as applicable, to provide the assistance described in 
        subsection (e)(1) by December 31, 2030, to the Secretary of 
        Housing and Urban Development to carry out the Native American 
        Housing Assistance and Self-Determination Act of 1996 (25 
        U.S.C. 4101 et seq.).
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