Wisconsin Homeowners Assistance Program Removes Racial Component After Facing Challenge | local government

Governor Tony Evers reversed his decision to direct federal funds to people of color under a more than $92 million mortgage relief package after a conservative law firm claimed that this decision would be unconstitutional.

The Democratic governor first announced the Wisconsin Help for Homeowners program in August. The program is expected to provide approximately $92.7 million in federal American Rescue Plan Act funds to eligible homeowners across the state to help alleviate financial hardship associated with the ongoing COVID-19 pandemic by preventing defaults mortgage defaults and foreclosures and loss of utilities and energy. .

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However, one element of the original proposal drew criticism from the nonprofit Wisconsin Institute for Law and Liberty, which claimed that the state’s plan to follow federal guidelines would constitute discrimination under the United States and state constitutions.

The federal government directs states to provide subsidies to homeowners whose income is equal to or less than 100% of the region’s median income for their household size. However, states were permitted to increase the income eligibility pool to those earning 150% of the region’s median income if funding was allocated to “socially disadvantaged” individuals, defined by the federal government as Black Americans, American Hispanics, Native Americans and Asians. Americans and Pacific Islanders. Other people earning between 100% and 150% would not be eligible.

The program was officially launched last week and focuses only on those whose income is at or below 100% of the region’s median income for their household size.

“It’s a relief that the Evers administration recognized the clear constitutional and legal issues we identified in the design of this program and resolved them before the money was distributed,” said the associate attorney for WILL, Dan Lennington, in a statement. “The program is now open to all Wisconsin residents, regardless of race, and that’s great news.”

The State Administration Department estimated that there were more than 914,000 Wisconsin households earning between 100% and 150% of the region’s median income, according to a letter WILL sent to Evers earlier this year. Nearly 60,900 of those households meet the federal government’s definition of “socially disadvantaged,” while the remaining more than 850,000 households are white.

Evers’ office did not respond to a request for comment on Monday. The Democratic governor said in a statement last week that the program “will provide a lifeline to homeowners who might otherwise risk losing their homes due to the hardships created by the pandemic.”

The DOA has partnered with agencies of the Community Action Program Association of Wisconsin and Take Root Wisconsin to assist with the grant application process. Applications are open on a first-come, first-served basis at homeownerhelp.wi.gov.

WILL has previously challenged the federal government’s reasoning for allocating federal funds based on race, including a lawsuit filed last year on behalf of a handful of residents in several states, including Wisconsin, challenging the president’s proposal. Joe Biden to allocate subsidies to farmers and ranchers, including $4 billion to more than 20,000 Wisconsin farmers.

The lawsuit alleged that the Biden administration engaged in unconstitutional racial discrimination through a provision of the US bailout aimed at providing debt relief to “socially disadvantaged” farmers and ranchers. A temporary restraining order was granted last June.

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WILL, on behalf of a handful of companies, also successfully sued the U.S. Small Business Administration for the agency’s prioritization of businesses owned by women, veterans, and socially disadvantaged individuals when allocating $28.6 billion in Restaurant Revitalization Fund grants last year.

A federal appeals court ultimately ruled in favor of WILL, issuing a 2-1 opinion that the government cannot allocate limited coronavirus relief funds based on race and gender. As a result, the SBA notified 2,965 business owners who had originally been approved for grants that those funds would now be denied and the application process moved to a first-come, first-served basis.