Over the past two weeks, the COVID-19 pandemic has at least temporarily shuttered a wide variety of small businesses, especially those in the restaurant, nightlife, hospitality, beauty, and entertainment industries. In turn, millions of people have been left with no source of income, and if you’re one of these people, you might be struggling to afford typical monthly expenses such as your rent or mortgage. The idea of not having a roof over your head might be scary, but there are steps you can take if you can’t pay your rent or mortgage due to the coronavirus – here’s what to do.
Don’t panic – you may be safe (for now)
If you can’t pay your rent or mortgage due to coronavirus, you may have at least temporary relief. Last week, President Trump said that the U.S. Department of Housing and Urban Development (HUD) will ban evictions and foreclosures through the end of April. In the event your landlord threatens to evict you or the bank threatens to foreclose on your apartment, you can attempt to contact HUD and have the department interfere on your behalf. It remains unclear whether HUD will require tenants and homeowners to eventually make postponed payments.
What to do if you own your apartment
If you own your apartment, begin by contacting your loan servicer. You may qualify for a special COVID-19 waiver. Once you get in touch, if your lender fails to cooperate with you and disobeys any obligations outlined in your mortgage contract, you can report your lender to the Consumer Financial Protection Bureau and your state attorney general’s office.
Next, reach out to your bank. Many leading banks have introduced programs to address their customers’ COVID-19 needs. As you contact your bank, keep in mind that, just as with lenders, these organizations may eventually require you to pay your mortgage even if you’re granted temporary payment delays.
As an absolute resort, you can put your loan in forbearance. However, the immediate relief this option provides may not be worth the long-term interest that still builds on your loan. If you do pursue forbearance, no two forbearance options have the exact same terms, so ask your lender for details first before committing.
What to do if you rent your apartment
If you rent your apartment, contact your landlord as soon as possible to discuss your situation. Some landlords will be sympathetic to your situation – for example, a landlord in Maine went viral on social media for pledging not to collect rent in April. If you’re lucky, your landlord may take the same step, especially if you have a good relationship with them.
If your landlord sympathizes with your situation but still needs to collect some amount of rent, you can try to discuss a reduced payment plan. For example, if your rent is $800, you can ask your landlord whether you can pay just $400 this month (or however much you can afford). If you worry that you can’t afford any rent, discuss a repayment plan instead. In this setup, you could take the $800 you owe for April and pay $100 more on eight future months of rent, whether those eight months begin in May or some other time after the pandemic passes.
If you’re exhausted all these options and your landlord still demands that you pay your full amount of rent, you can contact your bank for financial assistance. You can also call 211 to be connected with services that can potentially help you pay. You should also be sure to research new regulations that your municipality or state has enacted in the wake of the pandemic, as rules regarding rent payment during the pandemic may differ by region. You may even be able to find relief funds for workers that the pandemic has displaced from your industry.
Do you know of any additional resources for people who can’t pay rent or mortgage due to coronavirus? If so, please leave them in the comments for other readers to find. What you share may prove the make-or-break factor for many people facing immense obstacles that could completely alter their quality of life.