CLEVELAND, Ohio — A Cuyahoga County Council committee on Monday approved $2 million worth of mortgage assistance and financial counseling for homeowners that have fallen behind on payments due to the coronavirus pandemic.
If approved by the full Council, loans will be available starting Jan. 1 for low- to moderate-income homeowners in all Cuyahoga County municipalities other than Cleveland and the suburbs of Brecksville, East Cleveland, Euclid, Hunting Valley, Lakewood and Parma.
To be eligible, homeowners must have missed one or more mortgage payments due to pandemic-related causes, such as job losses, layoffs, reduced hours, or having to stay home due to illness, according to Sara Parks Jackson, housing and community development administrator for the county’s Department of Development
For a family of four to qualify, household annual income must be at or below $60,800.
The county expects to help about 800 households, though that figure will vary depending on demand and individual needs.
The administration of County Executive Armond Budish proposes that three area nonprofits vet applicants, distribute the money, and provide financial counseling. The organizations are Community Housing Solutions, CHN Housing Partners and Empowering and Strengthening Ohio’s People, which would receive up to a combined $200,000 in administrative fees for running the program, according to county records.
Money for the program comes from a U.S. Department of Housing and Urban Development block grant as part of the federal Coronavirus Aid, Relief, and Economic Security Act.
The program is the first mortgage-related help the county has offered since the pandemic began, and is set to go into effect at the beginning of 2021, after the federal foreclosure and eviction moratorium is lifted on Dec. 31.
About 6% of Cuyahoga County homeowners are at least 90 days behind on mortgage payments, up from 1.7% in March, Parks Jackson said. Once the moratorium ends next month, the county expects to see an influx of people needing help paying their mortgages.
The assistance would come in the form of a no-interest second mortgage, which requires no repayment until the property is sold or transferred, or in some cases, when the mortgage is refinanced, Parks Jackson told The Plain Dealer and cleveland.com. Assistance is expected to be capped at about $2,000 per household.
The nonprofits also would provide mandatory financial counseling for struggling homeowners, in part aimed at ensuring they can afford future payments without additional county assistance.
Homeowners would not receive assistance if the nonprofits determine they have enough money to resolve mortgage payments on their own, records state.
The nonprofits would also negotiate with banks and lenders on homeowners’ behalf, and may be able to arrange a deferred payment agreement, or alternate means of resolving debts, without the assistance of a loan, Parks Jackson said.
The reason why Cleveland, East Cleveland, Euclid, Lakewood and Parma homeowners are excluded from the program is because their cities received their own money from the U.S. Department of Housing and Urban Development for mortgage assistance. Brecksville and Hunting Valley homeowners are excluded because those cities do not participate in the agreement that makes the rest of the county’s communities eligible for the federal aid, county records say.