(TNS)—As homeowners and tenants continue grappling with the economic uncertainty of the pandemic, the federal government has promised aid to those struggling to meet their mortgage payments or rent. Getting that money into the hands of distressed folks quickly appears to be the challenge now.
The coronavirus relief package president Biden signed last month includes $10 billion in aid for homeowners to pay housing-related expenses including their mortgage, insurance and HOA dues. Another $46 billion has been set aside to assist renters, with two allocations in December and March.
But, as with most government programs, there’s a lot of bureaucracy and gray areas to navigate in order to receive the funds.
Who qualifies for aid?
Unfortunately, this question has a less-than-clear answer. The $10 billion will be distributed to states based on a number of variables including the number of unemployed residents and late mortgage payment data. It will be up to states to distribute the money to homeowners through their state housing agencies.
In order to qualify for the aid, you will need to own your home and have a principal mortgage balance at or below the conforming loan limit, which is $548,250 in most of the country or $822,375 in more expensive areas.
Beyond that, states are required to distribute at least 60% of the funds to homeowners with incomes that don’t exceed either the local median income or the national median income—whichever is higher.
That said, states will have considerable leeway in determining exactly who qualifies and how the aid is distributed.
Help Available for Renters Affected by COVID-19
The latest CARES Act update also included billions of dollars in assistance for renters, but the rollout has been uneven, and that doesn’t bode particularly well for the homeowner assistance, either.
Similar to the homeowner aid, rental assistance is being distributed by state and local housing authorities, which has required setting up sweeping new programs to connect residents with the relief they need. The New York Times reports it has not gone especially smoothly so far, with many renters struggling to navigate ad hoc the application processes and receive their funds.
“The rental relief component hasn’t gotten as much attention as mortgage forbearance but is incredibly important to tenants and landlords alike. The accumulated back rent over the past 13 months is more than tenants can realistically repay and has put mom-and-pop landlords between a rock and a hard place,” said Greg McBride, Bankrate’s chief financial analyst. “Payments that cover back rent ease the strain on tenants and landlords alike, avoiding future evictions.”
Because rental relief programs are administered locally, there’s no single path for tenants to follow. Your best bet may be to start with the HUD page for renters.
When will the homeowner mortgage payment help be available?
It’s unclear. Much like the rental assistance programs, state and local governments will have to stand up new frameworks to process and distribute this homeowner aid. It will likely take time for the details to be worked out and may happen unevenly as different local authorities go through their own processes.
What should I do in the meantime?
The best thing to do if you haven’t already is to be in touch with your lender.
If you’re struggling to meet your mortgage payments, you are much more likely to avoid foreclosure by working with your loan administrator than dodging them.
If you have a federally backed mortgage, you almost certainly qualify for forbearance and should pursue that option immediately if you haven’t already. You may be able to skip payments for up to 18 months under the federal rules.
If you’re already in forbearance and the grace period is about to end, or if you do not qualify, you should still be in touch with your lender. They may be able to help you modify your loan term, adjust your repayment plan, or find other options that can help you stay financially secure.
Bottom Line
The government has approved billions of dollars in aid for homeowners and renters struggling as a result of the COVID pandemic. The rollout and distribution of those funds has been a little uneven, but if you’re struggling to meet your mortgage payments, you should get in touch with your lender as soon as possible to discuss your options, regardless of any aid that may be available.
©2021 Bankrate.com
Distributed by Tribune Content Agency, LLC
I live in Worcestor Co Maryland, we have programs here but it’s hard to get this relief money. We’ve been behind last year in September 2020, we applied everywhere we could, but no help was given, and so we were evicted. We owe about 2 grand to that landlord. We went behind in rent a at another place which we recieved some help but not enough. One of us is still waiting for our unemployment to get fixed because of a mistake an agent made so now we owe over 2 grand, and we’ve applied again. We were so behind in rent that it’s hard to catch up. But we have organizations such as Diakonia, which claim that they helping people. We’ve been applying there since September 2020, we been bounced around to all kinds of people there, have done over 4 intakes, called almost everyday, left messages and still no call backs. But yet there are articles in the local papers saying how they are helping the renters of this community. We think these places need to be investigated. They are recieving funds, but are they really helping people like us that owe back pay in rent which was caused by covid-19.
This is so true! Worcester County, MD, is claiming they have received rent assistance from FEMA, eg. DiaKonia, but yet we cannot get help from anyone?! Due to back rent being owed, many evictions have happened, including my family. We are up for eviction tomorrow in court, due to being thrown around from person to person at DiaKonia, resulting in no help at all! Why is this???? Places need to stop false advertising for having money help if they are not using it to actually help anyone to make lives easier, as to keep residency at current places…Due to this bs, we have used our savings to stay in hotels, which is not cheap as to summer rates in tact, and will be staying in the car if nothing gets done to send us help in the next few days. During this pandemic, rent help is supposed to be a safety net, as put forth by the government…Yet, Is there any safe feelings for all the families put up for evictions as they keep being turned away and denied the help because of whatever bs reasons the facilities feel like spewing out that day and time???? NOPE! NONE AT ALL!! We are at the end of our financial road here, worried about having to stay in the car, and yet, no gives enough to care enough about real problems of the real middle class citizens. That is the largest amd saddest issue at hand here, and someone needs to do something about this before there are no tenants left for landlords to collect rent from, due to evicting them all cause of back pay owed and not having the means to pay up to current to stay around!!
So where can people go to recieve the federal help for housing and rent in Worcestor and Wicomico County in Maryland?? Are we all going to become homeless before anybody does anything, or by that time, there will be no more emergency rental and housing funds left to help families or individuals. Somebody needs to look into this matter before this situation gets out of hand, or maybe it has already! If there is anyone who likes to shed some light on this matter, it would be great to hear from somebody who knows were to go for help because we have been applying everywhere in those counties, or is there another way because surely we like to know. At least I know that we are not the only family that has been ignored. Can someone please help?