Housing Assistance for Homeowners, Renters, Landlords Impacted by COVID-19

Millions of unemployed workers wonder how they will pay their rent or mortgage payments. Small business owners worry about making their lease or mortgage payments for their businesses. Landlords fear that if renters no longer pay rent, how will they prevent these properties from going into foreclosure.

To date, here is the help available, on a federal and state level, to keep people in their homes during this pandemic.

Help for Homeowners Affected by COVID-19

Mortgage loans owned by Fannie Mae and Freddie Mac may be eligible for mortgage assistance, which includes:

  • Forbearance offered on mortgage payments for up to 12 months
  • No late fees
  • No delinquencies reported to the credit bureaus
  • Suspended foreclosure proceedings
  • Mortgage lenders commit to working with borrowers to catch up payments after payment suspensions end.

Borrowers must contact the loan service provider to request assistance.

Fannie Mae offers a loan lookup system to determine if Fannie Mae owns the loan.

Relief for Renters Affected by COVID-19

The Federal Housing Finance Agency (FHFA) extends a renter relief plan to tenants residing in properties financed by Freddie Mac. The agency agreed to defer loan payments for landlords who face hardship due to COVID-19. Property owners must demonstrate a hardship and receive lender approval. The program offers a 90-day loan payment deferment.

Landlords who choose to participate in the program must agree to stop all evictions due to non-payment. The measure will impact approximately 4.2 million renters in 27,000 properties, or approximately 43% of the multifamily units, single-family residents, and townhomes the US.

HUD also issued a moratorium on evictions to protect tenants in public housing. The order also prevents foreclosures on federally backed mortgages.

Many individual cities and states have placed restrictions on evictions to protect renters. Millionacres, a Motley Fool Company, compiled a state by state list of enacted legislation or executive orders protecting renters struggling to make payments.

Individual states have different requirements and different orders. Some states require tenants to follow specific protocols, and all require the tenant to contact the landlord and explain the circumstances. For instance, in California, renters must contact the landlord in writing within seven days of the rental due date, and declare they cannot pay the rent. They must then retain documentation illustrating the economic hardship.

Help for Landlords

Tenants and homeowners are getting most of the attention and most of the protections. However, if tenants stop paying rent, how will landlords pay the mortgage? Property owners must still pay mortgages, utilities, insurance, taxes, payroll, and property repairs. Without income, landlords risk losing the property to foreclosure, which could result in tenants losing their homes.

Most landlords are small businesses. Owners with two to four units account for 75% of all homes and apartments. The recently passed legislation has largely left landlord assistance out of relief packages.

Final Thoughts

Economists estimate that there is currently an unemployment rate of about 10%. That means that 90% of consumers can still make on-time housing payments. Those who can make payments, should. It will help cash strapped landlords provide assistance to tenants who have lost paychecks or face reduced hours.

Those who need help should reach out to their mortgage lender or landlord immediately for assistance. If that avenue does not bring the help needed, local non-profits might have the resources to help.

About The American Fair Credit Council

The American Fair Credit Council (AFCC) is a non-profit trade association representing consumer credit advocates who work on behalf consumers seeking to resolve their debts through the process of negotiation and settlement. AFCC Member Companies operate under a “No Advance Fee” model, and never charge a fee to consumers until a debt has been resolved. AFCC Members must also adhere to a strict “Code of Conduct”, ensuring they operate with the highest level of compliance, transparency and integrity. If you are currently experiencing a financial hardship, and having trouble making payments, you may locate a member company using our online search tool to learn more about programs to help you resolve your debt.