Relief for landlords and tenants during the COVID-19 shutdowns is coming in the form of economic stimulus and orders from governments both local and federal. You may have seen terms in recent headlines like “mortgage forbearance” and “eviction moratoriums.” But what exactly do these terms mean? And who is eligible to receive these leniency options? 

In the midst of the economic uncertainties of the global coronavirus pandemic, it helps to understand where you can find some relief. If you’re struggling due to financial difficulties caused by the coronavirus, mortgage forbearance and eviction moratoriums could be just that. 

Here’s how they work.

Mortgage forbearance is available for all Fannie Mae- and Freddie Mac-backed mortgage loans. 

For mortgage borrowers with loans that are backed by the federal government through Fannie Mae and Freddie Mac, you can apply for mortgage forbearance. The recently passed federal stimulus package suspends foreclosures on properties while also offering up to six months of forbearance on mortgage payments. To be eligible, however, a mortgage borrower must contact their loan servicer to acknowledge that the request is due to financial hardship as a result of the pandemic—no further proof is required, but the acknowledgment is essential to your forbearance application.
Forbearance means you can put your mortgage payments on pause—still accruing interest—while you negotiate lower payments or seek out additional economic opportunities. Forbearance will not reduce your overall mortgage payment, but it could give you room to breathe during these difficult times.  The Federal Housing Finance Agency will offer the same forbearance to multifamily properties with federally backed mortgages on one condition: that they suspend evictions for renters that can’t pay because of the COVID-19 pandemic.  

While this forbearance only applies to federally backed loans, some private lenders are offering similar options. For example, the state of California made a deal with certain financial institutions to allow for mortgage forbearance and the suspension of foreclosures. Contact your mortgage lender to find out what might be an option for you. 

Eviction moratoriums vary by state and property ownership. 

Despite the widespread relief instituted in response to the coronavirus pandemic and its effect on jobs and income, you aren’t necessarily guaranteed a hold on eviction if you can’t make your rent payment. 

Eviction moratoriums have been put in place across the United States only where the federal government has a more direct influence. Effectively, this means any property with funding backed by the Department of Housing and Urban Development, Fannie Mae, Freddie Mac, or the Federal Housing Administration will not face evictions and foreclosures for non-payment until the end of April – if non-payment is due to difficulties caused by the pandemic. 

This also means that homeowners renting out a home or apartment building that has any kind of active mortgage loan backed by these institutions cannot evict their tenants for non-payment. 

In addition, renters of properties with a federally backed mortgage cannot be charged late fees or penalties on rent payments delayed by the economic effects of the virus. 

Anything outside of that depends on the state, city, and property owner. In Idaho for example, the Supreme Court ordered a suspension of non-emergency court proceedings through April 15, effectively delaying most evictions. Additionally, the City of Boise placed an eviction moratorium on all city-owned properties through April. 

Remember that you should still pay rent if you can even if you aren’t under threat of eviction—your landlord will still expect that money down the line, and getting behind in rent could but you in a dangerous financial situation. 

How can I find out if I qualify for forbearance or an eviction moratorium?

If you an unsure whether any of the above qualifiers apply to your property or situation, consider the following steps:

• Contact your landlord about their policy on rent and evictions during the pandemic. 

• Contact your mortgage lender to determine if forbearance is possible for you. 

• Go online to find eviction moratorium information for your city and state. 

By covering all your bases on mortgage and eviction information, you just might find the relief you are looking for before the stimulus checks start coming in – up to $1,200 per individual adult making less than $75,000 per year, and an addition $500 per child. 

In the meantime, stay safe and remember we are all in this together. For more information on real estate and property management during the coronavirus pandemic, contact 208.properites today.