Legislation to extend the state’s residential foreclosure moratorium until May 15 has been proposed in the state Senate.

Sen. Brian Kavanaugh, D-New York City, introduced S.8397 on Tuesday for those who own 10 or fewer homes. The legislation has been referred to the Senate Housing, Construction and Community Development Committee.

New York’s eviction moratorium had paused most evictions until Jan. 15, except in cases in which landlords claimed tenants were damaging property or becoming a safety hazard. It covered hundreds of thousands of homeowners and commercial and residential tenants, who still have some protections from eviction and foreclosure.

New York previously allowed tenants to file court papers saying they had a financial hardship because of the coronavirus pandemic, and to use that hardship as a defense in eviction proceedings. It was up to landlords to prove a tenant didn’t have a financial hardship.

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Eviction

Kavanaugh’s legislative justification cited a state Homes and Community Renewal needs assessment from late 2021 that found among homeowners with annual household incomes below the median for their area, about 81,700 homeowners were either delinquent in their mortgage payments or coming to the end of their forbearance plan and would become delinquent; about 10,400 homeowners were delinquent in property taxes, water bills, and insurance; about 10,300 co-op and condo owners were delinquent in their maintenance or homeowners association fees; and about 3,400 homeowners in manufactured home communities were delinquent in their home loans or retail installment contracts.

“There are other homeowners who lost income during the COVID-19 pandemic whose incomes are above the median but who are nonetheless behind on their housing payments,” Kavanaugh wrote.

The state initially stopped accepting rental assistance applications Nov. 15, but a judge ordered officials last week to reopen the application portal for now, while the court considers a lawsuit filed by tenants and the Legal Aid Society. The portal reopened this week, though the state says the federal money that powered the program has run dry for most counties. However, applicants get protection from eviction while the state reviews their submissions. And if they get relief money and landlords refuse to accept it, tenants can use that as a legal defense if their landlords try to evict them for not paying rent.

“With respect to renters, the state’s COVID-19 Emergency Rental Assistance Program has become the principal means of protecting against eviction, with provisions to pay rent arrears and to prevent eviction of tenants whose application for assistance is pending,” Kavanaugh wrote. “The state is currently seeking additional funding from the federal government to cover the ongoing need for such assistance.”

New York was the first state to receive federal approval for a federally funded Homeowner Assistance Fund, launching a $539 million program on Jan. 3. Eligible homeowners can receive up to $50,000 toward mortgage arrears, co-op, condo or homeowners association fees, and municipal arrears such as property taxes, water, or sewage bills. In the first month of the program more than 25,000 applications were received, 93% submitted by homeowners with an annual household income below 80% of their area’s median income. In early February, it was announced the Homeowner Assistance Fund would stop accepting applications on Feb. 18, with those who applied after the cutoff date put on a waiting list and to be considered for assistance pending funding availability. Putting people on waiting lists and hearing appeals could take months, leading Kavanaugh to propose extending the eviction moratorium to give the state more time to handle the deluge of applications and to see if the federal government approves more rental assistance.

“There are several other programs that are available to assist homeowners facing hardships as a result of COVID-19, including various federal and state mortgage forbearance provision, restrictions on utility service interruptions, and the Homeowner Assistance Program (HOPP), which provides legal services and counseling to help homeowners navigate the various option, protect their rights, and stay in their homes,” Kavanaugh wrote. “However, the financial hardships faced by homeowners and the applicability of the various programs will take some time to resolve. As the COVID-19 pandemic continues to pose a public health threat and disrupt economic activity and New Yorkers’ daily lives, it is critical that the state extend the moratorium on mortgage and tax foreclosures and other actions that would otherwise jeopardize people’s homes.”