For people who have fallen behind on their mortgage or utilities due to pandemic-related hardship, the Kansas Homeowner Assistance Fund (KHAF) is a great benefit, says loan officer Julie Cannady of Community National Bank & Trust (CNB) in Augusta, Kansas. KHAF, administered by Kansas Housing Resources Corporation, has been allocated $56.6 million through the American Rescue Plan Act to help low- and moderate-income homeowners avoid foreclosure and get caught up. Lender participation is a vital component.

CNB registered early

CNB is one of the early loan servicer participants approved to receive KHAF payments, which are designed to prevent foreclosures in Kansas. The bank has already received one payment, bringing an elderly customer with health concerns current on her mortgage. “It’s a blessing for her,” says Cannady. There are four more CNB customer applications in the KHAF pipeline. Since all payments go directly to the delinquent account, not the homeowner, it’s vital for banks, credit unions and other loan servicers to get registered. “It benefits us, too,” Cannady says. “It helps the homeowner, and we avoid having a delinquent loan on our books.” 

“We signed up to be an approved servicer when a customer requested it,” says Cannady. A homeowner in need must apply, but applications can only be considered if the lender also participates by registering with the program.

Register only once
Marilyn Stanley, KHAF Program Manager at Kansas Housing Resources Corporation, says that any bank or other loan servicers with mortgages for homes in Kansas can get set up. “It’s easy to get registered, with just a few forms to submit, and then an online portal for payment information,” says Stanley. This makes the homeowner application process much smoother and facilitates payments.

Track progress in real-time
Once a servicer is approved, “The rest is easy,” says Cannady. The bank receives an email when a customer has submitted an application. The bank is then required to verify information about an applicant’s home loan, any delinquencies and the amount needed to bring the account current. Cannady can log in to the lender portal at any time to check on the status of an applicant. It shows the application pipeline and indicates if any information or action is needed from the bank. Cannady reports that none of CNB’s customers who have applied have been denied so far.

Who qualifies

Stanley encourages all Kansas banks and mortgage lenders to get registered and talk to customers who may benefit from this program. Homeowners must be at least 30 days past due on their mortgage and low- to moderate-income to qualify. They can see if they qualify by answering a few questions in the homeowner application portal.

“Financial instability and the fear of losing your home is traumatic. With KHAF, homeowners may get up to $35,000 in mortgage assistance, which can make a dramatic positive impact. Talk to customers who you think may benefit,” says Stanley. “This is a win-win for homeowners and lenders.”

Two ways banks should participate:

1. Register your bank.
   Fill out and submit a few brief forms (available online at: https://kshousingcorp.org/kansashomeowner-assistance-fund-lenders). A link will be sent to you to complete your registration setup so that your institution can receive payments for approved KHAF funds.
2. Refer delinquent or at-risk customers to the online portal to see if they qualify and help them apply.
   Homeowners in this situation may be overwhelmed. Your guidance is crucial to help them back to a stable footing. Homeowners can get more information and begin the application process online at:
   https://kshousingcorp.org/kansashomeowner-assistance-fund.

Additional resources

Online help is available with FAQs for homeowners and lenders, a homeowner checklist of needed documents and more on the web pages for lenders and homeowners. Once a lender has registered, more technical assistance and help videos are available on the secure portal.

With limited funds available, early application is encouraged. The program launched April 18, 2022, and will end when all funds have been allocated.