Still can’t pay your rent or mortgage? See how the new stimulus plan will help

Still can’t pay your rent or mortgage? See how the new stimulus plan will help

by

The plan includes $ 27 billion in rent assistance, $ 10 billion in mortgage payments and $ 5 billion to deal with the homeless.

While this unprecedented amount of aid will provide relief for millions, it still won’t be enough to cover the continuing need for housing assistance, said Diane Yentel, president and chief executive officer of the National Low Income Housing Coalition.

At the end of February, 13.5 million people said they were behind on rent – nearly 1 in 5 renters – according to an analysis by the Budget and Political Priorities Center in a survey by the Census Bureau. Renters owe about $ 57 billion in late rent, according to a report by Moody’s Analytics.

There are 2.6 million homeowners currently on a tolerance program, allowing them to delay or postpone their payments according to Black Knight. At the end of January, an estimated $ 19 billion in principal and interest payments were due because of the pandemic, the mortgage data company said.

“Combined financing of this project and the previous project could solve most, if not all, of the delays,” said Yentel. “But more will be needed for ongoing challenges.”

Rent a franchise

The main source of rent reduction in the new law is $ 21.55 billion in emergency rental assistance. This funding will be added to the $ 25 billion in aid that went to states and localities in December to help families pay rent and utilities and stay in their homes.
Yentel said that, according to his organization’s database that tracks the bailout, most of the December funds have yet to reach tenants or homeowners. (Direct links to programs that offer state and local emergency rental assistance programs across the country can be found on the NLIHC website and other information on rental relief programs can be found on the Consumer Financial Protection Bureau website.)

But there are other sources of rent reduction in the new package that are more targeted. For example, $ 100 million has been set aside for people who live on USDA-subsidized rural properties and are struggling to pay rent.

'I have $ 4 in my name.' An extended eviction ban is not enough for some struggling renters

For the homeless, the law includes $ 5 billion in emergency housing vouchers. Another US $ 5 billion is earmarked for the creation of socially distant housing and non-collective shelters.

To address the increasing housing challenges in the past year, the plan provides $ 100 million for housing advice and $ 20 million for fair housing organizations.

For those struggling to cover their utility costs, the stimulus package includes $ 4.5 billion for the Low-Income Domestic Energy Assistance Program and $ 500 million for low-income water assistance.

Owner assistance

Unlike previous stimulus and relief packages, which provided some protection for homeowners but no direct assistance, the American Rescue Plan offers $ 10 billion in direct financial assistance to distressed homeowners.

These funds are designed to help homeowners avoid foreclosure and catch up on mortgage payments, utilities, property taxes and insurance, said David M. Dworkin, president and chief executive officer of the National Housing Conference.

While the percentage of mortgages with indulgence is falling – it is now below 5% for the first time since last April, according to Black Knight – there are some 800,000 indulgence plans that will expire at the end of the month.

Together with their credit agents, these owners will need to decide whether they want to get out of tolerance and make a plan to pay the deferred amount or request an extension. Most pandemic-related patience relief programs are currently scheduled to expire in June. Federal foreclosure bans are also expected to expire in June.

The American Rescue Plan Act also offers $ 39 million in assistance to low-income families who became owners through certain USDA mortgage programs and who delayed their payments during the pandemic.

What’s not in the account

Difficult tenants who have given a statement to the landlord that they are unable to pay the rent and will make their best efforts to pay what they can are protected from eviction by the national ban ordered by the Centers for Disease Control and Prevention. But this protection is set to expire at the end of the month.
The request was put into effect for the first time in September and has been extended twice, most recently by President Biden on his first day in office.

Yentel said the eviction moratorium must be extended so that the billions in relief money that have not yet been distributed have the intended effect of supporting tenants who owe arrears.

“There are landlords who refuse to participate in the program and look at the clock for another three weeks until they can evict their tenants,” she said.

Yentel said he would also like to see the ban enforced and enforced.
Unpaid rent is piling up. Owners can't take it forever

“The order is flawed because there is an alarming number of evictions taking place while it is in place,” she said. “Currently, protections are not automatic, we would like to see this change. ‘

But groups of homeowners say the eviction moratorium continues to pose an exaggerated burden on homeowners, some of whom have been out of rent for a year.
Currently, there are a number of legal challenges to the CDC eviction moratorium. This week, a federal judge in Ohio ruled that the CDC overstepped its authority by banning eviction across the country, according to court documents. The Justice Department is appealing a decision by a federal judge in Texas declaring that the federal eviction moratorium is unconstitutional.

“While the stimulus will go a long way in addressing the economic difficulties caused by the pandemic, the continuation of the moratorium on evictions will have serious and negative consequences for the millions of family homeowners who represent 95% of single-family households in the industry and have struggled against long-standing government restrictions and mandates, “said David Howard, executive director of the National Rental Home Council, which represents the single-family home rental industry.

.Source