As the Coronavirus Crisis enters its second month in the U.S., workers across the country have lost their jobs at alarming rates. In an unprecedented time, tenants face significant financial hardships, and many can’t pay the upcoming rent. However,
In Part One https://1l.ink/8PCZVSW we examined how landlords can offer compassion to their renters while still protecting their own financial wellbeing. Now, in Part Two, we highlight programs that can help both tenants and landlord find the services they need to make it through this crisis and emerge financially solvent.
Resources for Landlords Landlords are about to face financial hardships. As tenants fail to pay rent, that will inevitably affect property owners. However, there are resources available to help landlords survive this crisis:
Stimulus Checks Many Americans – regardless of employment status – will receive a stimulus check thanks to a $2 trillion Congressional bailout bill. The bill gives $1,200 to each adult in a household and $500 per child to every American making under $75,000 individually or $150,000 jointly. The stimulus amounts then phase out based on earnings over those thresholds. Many American landlords aren’t multi-millionaires. In fact, about half of all real estate investors are “mom and pop” landlords who only own one or two properties. These landlords count on the rent to pay their mortgages. Therefore, many landlords will likely receive at least some of the $2 trillion bailout, which can then pay at least part of the mortgage on their investments.
Lender Forgiveness If you’re worried about paying this month’s mortgage on your rental properties, contact your lender. Many lenders are offering mortgage assistance programs, including penalty-free deferrals and no-interest Home Equity Lines of Credit (HELOCs). For more information about which banks are offering these programs, click here.
Government-Backed Foreclosure Protection The federal government and the Federal Housing Agency have suspended evictions and foreclosures on any FHA, Freddie Mac, or Fannie Mae mortgages and rental properties. In some instances, lenders will defer payments for up to 180 days. If you have a federally-backed mortgage on your rental property, you may request a forbearance on payments due to Coronavirus-caused financial hardship. You must contact your financial institution to request a forbearance.
Non-Government Backed Mortgages Many privately-owned mortgages are adopting similar protections for their customers. To see what protections and programs are available, contact your lender. You may be able to defer payments without any penalties or negative impacts on your credit.
Small Business Financial Relief If your investments and/or property management are part of an incorporated small business, you might be eligible for further financial assistance under the federal bailout. The bill provides no-interest loans, debt forgiveness, and other support for small business owners. Learn more here.
Resources for Tenants If your tenants are looking for ways to stay afloat during this time, you might consider directing them to these resources:
Stimulus Checks The $2 trillion bailout package that will give at least some financial relief to tenants, particularly those who have lost jobs because of the Coronavirus fallout. Tenants can use these payments in any way they choose, including paying rent. However, these payments won’t arrive for several weeks, so rent payments due on the first of the month will still be late.
Unemployment Benefits The bailout bill allows workers to file for unemployment almost immediately after being laid off. In addition, each worker will receive an extra $600 in unemployment assistance for up to four months. Click here to learn more about eligibility and how to apply for unemployment. Even independent contractors, like Uber drivers or freelancers, are eligible for these benefits.
Moratoriums on Evictions The Federal Housing Administration recently passed a bill that places a moratorium on evictions for non-payment for up to 120 days. That means renters living in federally-backed properties, like HUD housing, cannot be evicted during this crisis. However, the moratorium only applies to tenants who were in good standing with their payments before the crisis hit. Therefore, if you’re already behind on rent, you won’t be eligible for this protection.
Deferred Payments on Other Loans Many banks and lenders are offering loan deferments during the Coronavirus crisis. Car loans, student debts, and credit card payments might be eligible for interest-free deferment. Contact your lenders and bank to see if they have any provisions in place. By deferring payments on your debts, you might be able to save enough money to pay your rent for a month or two, until you can get back on your feet.
Tenants should contact their landlords as soon as possible if they face unemployment. Many landlords are working out payment plans or rent reductions for tenants. Both tenants and landlords alike face uncertain weeks and months ahead. But there are services in place to protect both parties. Contact your lenders, banks, and other financial institutions to see what services they offer. We can get through this crisis together.
At Designated Broker Solutions, we are fully licensed in 36 states, ready to help owners and property management teams meet their state-specific compliance requirements. Contact us today!
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