The Centers for Disease Control (CDC) instated a new temporary eviction ban Tuesday after Congress recessed into its summer session without enough votes needed from Democrats to extend the federal eviction moratorium past July.
The new moratorium, which expires on October 3, is meant to protect tenants in "areas of the country where [COVID-19] cases are rapidly increasing, which likely would be exacerbated by mass evictions," the CDC stated. While a recent Supreme Court ruling limited the options when it comes to extending the eviction freeze, the CDC worked over the weekend to find a new temporary solution at President Joe Biden's request. His administration also recently extended the eviction moratoria for federally backed loans until September.
Although the new temporary ban will ensure some residents can stay in their homes a little longer, evictions will still remain costly and time-consuming. Landlords considering such action still have several alternative relief options they could consider before sending out notices to their tenants.
Keep reading to find out what those options are – including a mortgage refinance to reduce their own payments and allow for more payment flexibility with their tenants. If you're thinking of refinancing, consider using Credible. Head there now to easily compare multiple lenders (for free) and see prequalified rates in as little as three minutes.
Assistance is available for both tenants and landlords to keep up with their payments despite the end of the eviction freeze for some, including funding from the American Rescue Plan. White House Press Secretary Jen Psaki, though, has been critical of the speed at which some governors are distributing those funds.
"There's a great deal – tens of billions of dollars – that can still be spent by states, she said Tuesday, adding that Biden is pushing states to take action. "We made some progress in June but we're really pressing states to get this money out and extend the eviction moratorium from a state level."
Landlords who want to avoid a costly eviction process can consider these options:
- Apply for federal aid
- Refinance the mortgage
- Go into mortgage forbearance
1. Apply for federal aid: As part of the American Rescue Plan, more than $21 billion was made available to keep Americans in their homes, while the Consolidated Appropriations Act, enacted in December 2020, provided up to $25 billion. These funds were distributed to state governments through the U.S. Department of the Treasury’s Emergency Rental Assistance Program (ERA).
But tenants aren’t the only ones eligible to apply for the funds.
In fact, three in four programs funded by the ERA take applications from landlords, according to the Consumer Financial Protection Bureau. Eligibility for federal rental assistance is based on the tenants household income and the financial hardships they are facing such as a tenant’s nonpayment of rent. It could cover up to 18 months of rent, including unpaid rent incurred during economic shutdowns as well as future rent in some cases.
2. Refinance the mortgage: If landlords are having trouble paying for their mortgage as rent payments have slowed or even stopped, refinancing their mortgage could allow them to reduce their monthly payments by hundreds of dollars and give them more flexibility to work with tenants.
Luckily, Credible makes it simple to compare mortgage rates. Click here to view today's featured refinance rates and view home loans based on APR, fees, and monthly payments depending on your loan amount.
3. Go into mortgage forbearance: Landlords who are unable to make their mortgage payments can also request forbearance without affecting their credit if their loan is backed by Federal Housing Administration, U.S. Department of Agriculture or Department of Veterans Affairs. The deadline for these loans is Sept. 30, 2021.
If the loan is backed by mortgage giants Fannie Mae or Freddie Mac, landlords can request forbearance without worry of a deadline for now. This could allow homeowners to pause on their mortgage payments while in financial hardship, or if a renter is unable to make their payments.
If you are struggling to make your monthly payments, contact Credible to speak to a home loan expert and view the options available to you. Credible can help you compare mortgage lenders and discover the best refinance rates available today so you can lower your monthly payments and meet your financial goals.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at email@example.com and your question might be answered by Credible in our Money Expert column.