On March 27, President Trump signed a $2 trillion coronavirus stimulus package that provides financial relief for individuals, small businesses, state and local governments, and other entities. Included in the package are significant mortgage relief options for apartment owners who are at least temporarily unable to make their usual monthly payments. Here’s everything you need to know about how the coronavirus stimulus package addresses mortgage relief.
According to the coronavirus stimulus package, apartment owners with federally backed mortgage loans issued by Freddie Mac or Fannie Mac can apply for up to six months of forbearance on their payments. To apply for forbearance, apartment owners must submit their requests directly to their loan servicer and verify their inability to pay their mortgage. Letters of termination and other documents proving job loss may be helpful to include with request submissions.
Additionally, during this six-month period, no lender may apply extra interest, fees, or penalties to an existing mortgage, though interest will accrue as usual during forbearance. Outside the terms set in the coronavirus stimulus package, certain loan servicers and banks have introduced waivers and special programs intended to help homeowners with their payments.
Freddie Mac and Fannie Mac have taken additional measures beyond the terms of the coronavirus stimulus package to help homeowners. Lenders who must answer to these companies have been ordered to give homeowners payment breaks lasting as long as one year – twice the length that the coronavirus stimulus package mandates for new forbearance applications – and suspend all penalties and late fees. Additionally, Freddie Mac and Fannie Mac are requiring that lenders not report late payments by affected homeowners to credit bureaus.
Despite the terms that Freddie Mac, Fannie Mac, and the coronavirus stimulus bill have set, it remains vital for you to contact your loan servicer if you’re affected. These terms are not automatically set and only apply to apartment owners who present and prove their situations to their loan servicers. It is also important to remember that these measures present options for delaying your payments rather than entirely forgiving your debts.
Limits on foreclosures and evictions
Over the next six months, apartments with federally backed mortgage loans cannot be foreclosed upon. Additionally, tenants renting these apartments from their owners may not be evicted, nor may landlords charge these tenants with late fees, penalties, or any other charges associated with late rent payments. If you’re an affected tenant in such an apartment and your landlord is still demanding your rent in full, you may have other options for tending to your situation.
Individual taxpayer checks
Though not directly related to mortgage relief, the individual taxpayer checks included in the coronavirus stimulus package may be helpful for your mortgage payments. If your income has been somewhat reduced rather than eliminated, this one-time check could help you to make upcoming payments. However, since this check is a one-time payment that begins at $1,200 and increases by $500 for every dependent filed on your tax return, it may not be enough to cover your mortgage. Even if you can use these checks to help with payments in the short term, you may need to consider other options in the long term – and with the pandemic’s effects changing every day, other options could be rolled out in the near future.