New HUD Regulatory Actions Help Low-Income Homeowners

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The Department of Housing and Urban Development (HUD) recently announced changes to its Distressed Asset Stabilization Program (DASP), which brings relief to families with severely delinquent home mortgages. The program, part of the Federal Housing Administration (FHA), would allow those that qualify to reduce their principal loan amount.

Housing is well understood to be an important factor of physical and mental health and well-being. Certain families with distressed mortgages could soon be eligible for a reduction of their outstanding loan amounts as part of the new regulations.

Families that pay excessive amounts of their monthly and/or yearly income for housing often have insufficient funding remaining for other needs, such as food, medical insurance, and preventative healthcare. The new regulation prohibits investors from abandoning low-value properties in high-foreclosure neighborhoods to prevent urban blight.

“[HUD Secretary Julian Castro] deserves great credit for his proactive effort to ensure that struggling homeowners have their best chance to avoid foreclosure and remain in their homes,” said League of United Latin American Citizens National Executive (LULAC) Director Brent Wilkes in response to the new regulations. “During his two years in office, the Secretary has repeatedly demonstrated his strong commitment to helping families stay in their homes and has exhibited great skill in strengthening HUD’s programs to help those most in need.”

The new DASP regulations come in addition to changes made last year to help defaulting homeowner families still living in their homes by expanding a foreclosure moratorium from 6 to 12 months. Residential instability and multiple moves among adolescents and children have been found to have a compounding negative effect upon their behavior and mental well-being.

“Secretary Castro’s leadership in this important area is to be commended and demonstrates yet again that he is a public servant we can all work with and be proud of,” said Wilkes. “LULAC will continue to collaborate with HUD, as it has throughout this process, in order to ensure that the agency does everything it can to help low-income communities improve their quality of life.”

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