Resource Center

The unprecedented rise in residential foreclosure has affected owners, tenants and the neighborhoods in which large numbers of foreclosures are taking place. This page provides an overview of the impact of foreclosure on tenants and neighborhoods. It also includes information on foreclosures of rural single family homes financed by the Department of Agriculture, and provides a brief summary of the federal response. More specific information is also available on this site about the impact of foreclosure on tenants, neighborhoods and Section 8 Housing Choice Voucher Program (HCVP) and Project-Based Section 8 tenants.

The Housing and Economic Recovery Act (HERA) of 2008, enacted July 30, 2008, covers a number of areas related to foreclosure, including authorizing the Federal Housing Administration (FHA) to refinance $300 billion of mortgages under the HOPE for Homeowners Program, allocating $3.92 billion for the Neighborhood Stabilization Program (NSP), and establishing the Affordable Housing Trust Fund and the Federal Housing Finance Agency (FHFA).

The Emergency Economic Stabilization Act (EESA), enacted October 3, 2008, provides $700 billion to the Treasury Secretary to purchase troubled assets. EESA requires that the Treasury coordinate with a number of federal entities, including the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac), to allow tenants to remain in their homes post foreclosure. In the fall of 2008, FHFA placed Fannie Mae and Freddie Mac into conservatorship and announced the creation of a streamlined loan modification program. For a short period of time between the last quarter of 2008 and the end of the first quarter of 2009, Fannie Mae and Freddie Mac suspended evictions and foreclosure sales from occupied single-family properties. Freddie Mac also adopted a policy to allow former owners to remain in the foreclosed home as renters.

On February 17, 2009, the Administration announced the Homeowner Affordability and Stability Plan designed to reduce foreclosures and stabilize the housing market. This plan is part of the Administration’s more comprehensive Financial Stability Plan. Components of the former plan include refinancing of mortgages owned or guaranteed by Government Sponsored Entities (GSE) such as Fannie Mae or Freddie Mac, a $75 billion foreclosure relief program which is known as the Making Home Affordable program funded out of the Troubled Asset Relief Program (TARP) authorized in EESA, and additional funding so that Fannie Mae and Freddie Mac may continue to purchase mortgages.

On May 20, 2009, the President signed into law the Helping Families Save Their Homes Act and the Fraud Enforcement and Recovery Act. The Helping Families Save Their Homes Act includes improvements to assist homeowners, as well as significant tenant protections. The benefits for homeowners facing foreclosure include improvements to the HOPE for Homeowners program and modifications to Federal Housing Administration (FHA) and federally guaranteed rural housing loans. The act also includes measures to increase the flow of credit and appropriates $2.2 billion for homelessness programs. The Fraud Enforcement and Recovery Act strengthens the capacity of the federal government to fight fraud.