Still having trouble paying your rent or mortgage? Here’s how the new stimulus package will help

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The plan includes $ 27 billion in rent relief, $ 10 billion in mortgage payment relief and $ 5 billion to fight homelessness.

While this unprecedented amount of aid will bring relief to millions of people, it will still not be enough to meet the continued need for housing assistance, said Diane Yentel, President and CEO of the National Low Income Housing Coalition .

At the end of February, 13.5 million people said they were behind on their rent – almost 1 in 5 of all tenants – according to a Center’s analysis of the budget and political priorities of a survey of the Census Bureau. Tenants owe about $ 57 billion in rent arrears, according to a Moody’s Analytics report.

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

“The combined funding of this bill and the previous bill could clear most if not all of the arrears,” Yentel said. “But more will be needed to meet the lingering challenges.”

Rent relief

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

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

`` I have $ 4 in my name. Prolonged eviction ban not enough for some troubled tenants

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

To deal with the increase in housing problems over 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 energy assistance program for low-income homes and $ 500 million for assistance. water for low-income people.

Assistance to owners

Unlike previous recovery and rescue plans, which offered some protections to homeowners but no direct help, the American Rescue Plan offers $ 10 billion in direct financial assistance to struggling homeowners.

These funds are designed to help homeowners avoid foreclosures and catch up on mortgage, utility, property tax and insurance payments, said David M. Dworkin, conference president and CEO. National Council on Housing.

As the percentage of forbearance mortgages declines – it is now below 5% for the first time since last April, according to Black Knight – there are some 800,000 forbearance plans that will expire by the end of the month.

Working with their loan managers, these homeowners will have to decide whether they want to exit the forbearance and set up a deferred amount repayment plan, or request an extension. Most of the forbearance relief programs linked to the pandemic will currently expire in June. Federal bans on foreclosures are also set to expire in June.

The American Rescue Plan Act also provides $ 39 million in assistance to low-income households who became homeowners through certain USDA mortgage programs and who fell behind on their payments during the pandemic.

What is not in the bill

Tenants in difficulty who have made a declaration to their landlord that they are unable to afford the rent and will do their best to pay what they can be protected from eviction by the nationwide ban by the Centers for Disease Control and Prevention. But this protection will currently expire at the end of the month.
The order was first put in place in September and has been extended twice, most recently by President Biden on his first day in office.

Yentel said the moratorium on evictions needs to be extended so that billions of relief dollars that have not yet been dispersed have the intended effect of supporting tenants who owe rent arrears.

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

Yentel said she would also like to see the ban strengthened and enforced.
Unpaid rents accumulate. Owners cannot hold on indefinitely

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

But homeowner groups say the moratorium on evictions continues to place an inordinate burden on landlords, some of whom have been deprived of rent payments for a year.
There are currently a number of legal challenges to the moratorium on CDC evictions. This week, an Ohio federal judge ruled that the CDC had overstepped its authority in issuing a nationwide deportation ban, court documents show. The Justice Department is appealing a decision by a Texas federal judge declaring the federal moratorium on evictions unconstitutional.

“Although the stimulus will go a long way to alleviating the economic difficulties caused by the pandemic, the continuation of the moratoriums on evictions will have serious and negative consequences for the millions of” mom and dad “owners who represent 95% of the single-family rental home” said David Howard, executive director of the National Rental Home Council, which represents the single-family rental home industry.

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