The American Rescue Plan Act of 2021 established the Homeowner Assistance Fund (HAF) in the U.S. Department of the Treasury in order to provide financial assistance to eligible homeowners who have suffered financial hardships during the COVID-19 National Emergency. Qualified expenses may include loan payment assistance, loan reinstatement, utilities, insurance, and other housing-related costs. Servicers are to inform Veteran-borrowers suffering financial distress that these additional resources may be available through their state.
More information about HAF by state can be found at: https://www.ncsha.org/homeowner-assistance-fund/.
If a mortgage servicer receives information (for example, from the state or through the state’s online HAF notification) confirming that the Veteran-borrower has applied for HAF funds, loan servicers can place the loan in a 60-day forbearance status and suspend foreclosure actions.
In such cases, loan servicers are to submit a Special Forbearance Event via the VA Loan Electronic Reporting Interface (VALERI) to notify VA the loan is in forbearance.
Yes. Loan servicers are strongly encouraged to place the loan in forbearance and suspend foreclosure actions whenever the servicer receives notice that a borrower has applied for HAF assistance.
In such cases, loan servicers are to submit a Special Forbearance Event in VALERI to notify VA the loan is in forbearance.
Yes. Loan servicers are to place the loan in forbearance (as necessary to implement the HAF assistance) and suspend foreclosure actions.
In such cases, servicers are to submit a Special Forbearance Event in VALERI to notify VA the loan is in forbearance.
Yes, Veteran-borrowers can use HAF in conjunction with VA’s home retention options. VA permits HAF funds to be used, for example, as part of a Veteran-borrower’s COVID-19 Refund Modification, COVID-19 Veterans Assistance Partial Claim Payment option, and other home retention options. However, state programs have different allowable uses for HAF funds.
*Because VA does not administer HAF funds, Veteran-borrowers and their loan servicers should also check the requirements specific to their area to be sure there are not local, non-VA restrictions that apply.
Yes. Where HAF funds are available to a Veteran-borrower, VA would expect the servicer to accept HAF funds. The servicer must apply the HAF funds as permitted by the State’s HAF requirements. This may require the servicer to use the HAF funds in conjunction with VA’s home retention options. State programs have different allowable uses for HAF funds.
*Because VA does not administer HAF funds, Veteran-borrowers and their loan servicers should also check the requirements specific to their area to be sure there are not local, non-VA restrictions that apply.
Servicers should apply HAF funds to offset the amount necessary to bring the loan current. This means HAF funds should be used first to reduce the amount the Veteran-borrower would owe VA for the partial claim or refund modification. The servicer should then work with the Veteran-borrower to implement the option.
Yes, if allowable under the HAF program, Veteran-borrowers who already received assistance under such an option may use HAF funds to help pay off the partial claim or refund modification subordinate lien. The funds to help pay off such liens should be sent directly to VA, in care of BSI Financial Services, at:
Partial Claim payments:
BSI Financial Services
P.O. Box 679002
Dallas, TX 75267
Yes, the servicer may use HAF to bring the loan current. However, if the Veteran-borrower cannot resume their current monthly loan payment, servicers are to evaluate the Veteran-borrower for home retention options in conjunction with the use of HAF funds. State programs have different allowable uses for their state HAF funds.
*Because VA does not administer HAF funds, Veteran-borrowers and their loan servicers should also check the requirements specific to their area to be sure there are not local, non-VA restrictions that apply.
As allowable by the state, HAF funds can be applied for assistance with loan payments, as a lump sum to reduce the principal balance of the loan, to help pay off a partial claim or refund modification subordinate lien, and for other specified purposes.
Servicers should refer to a State’s HAF program guidelines to determine how HAF funds may be applied.
Servicers should also refer to any investor requirements, if applicable, to determine whether there may be restrictions on modifying the loan.
BSI Financial Services
P.O. Box 679002
Dallas, TX 75267
Payoff request email: payoffrequest@bsifinancial.com
Payoff request phone: 877-804-4832
Customer Care: 800-327-7861
