Eviction moratorium and forbearance programs can help people facing COVID-19 hardships stay in their homes. Get to know your options here.
COVID-19 created deep uncertainty and anxiety for renters and homeowners alike, and that uncertainty hasn’t abated much since the start of the pandemic.
The CDC eviction moratorium has been extended several times, preventing a wave of residential evictions. Similarly, mortgage forbearance relief has helped homeowners stay in their houses as they struggled with the economic fallout of COVID-19 layoffs and downturns.
But as new cases surge due to the Delta variant and some relief programs have looming expiration dates, serious questions remain about what tenants and homeowners can do to stay in their homes and avoid eviction or foreclosure.
If you’re concerned about being able to stay in your home or get caught up on back rent or mortgage payments, this guide will help you understand your rights and the options available to you.
The Centers for Disease Control and Prevention (CDC) issued an eviction moratorium in 2020 in response to the pandemic, as millions of Americans were laid off or lost their jobs as communities went into lockdown and businesses closed their doors.
The CDC order was meant to prevent tenants from being forced out of their homes, potentially onto the streets, into shelters, or into crowded living conditions with friends and family. Any of these scenarios could cause further spread of COVID-19 and exacerbate the public health crisis.
As the pandemic has persisted, despite the availability of vaccines, the CDC has extended the moratorium several times.
The present order is in place until Oct 3., and it stipulates that renters cannot be evicted for being overdue on rent in U.S. counties with high rates of COVID-19 transmission. That includes about 90% of renters in the U.S.
However, landlords can still evict tenants for reasons other than nonpayment of rent. For instance, they can evict a renter who keeps a pet if pets aren’t allowed in the building, or other violations of their lease agreements.
If you are behind on your rent and you live in an area protected by the CDC eviction moratorium, you must sign a declaration form and submit it to your landlord.
The declaration form includes a number of questions to verify whether you qualify for protection under the moratorium, such as:
When you sign the form, you also acknowledge that you will owe back rent and fees when the moratorium ends and that you can be evicted if you do not pay those past due amounts at that time.
You can download the declaration form here.
Be sure to submit the declaration form to your landlord or property manager.
The current moratorium is set to expire Oct. 3, but the Biden administration could extend the CDC order or implement a new moratorium.
The CDC eviction moratorium has withstood several legal challenges so far -- even as a federal judge doubted the ban’s legality. But the moratorium’s days may be numbered.
At some point, the CDC could stop renewing the order, or a federal court could declare it unconstitutional. The Supreme Court has already overruled some state-level eviction moratoriums such as New York State’s.
And when the Supreme Court voted to uphold the CDC’s federal eviction moratorium earlier this summer by a 5-4 vote, Associate Justice Brett Cavanaugh cast the deciding vote. He said he didn’t envision voting in favor of the ban again.
He will have a chance to uphold or strike down the moratorium in the coming weeks, as the issue went back to the Supreme Court in late August.
If the current eviction protections expire and local courts start hearing eviction cases again, tenants who owe back rent will have to bring their accounts current to avoid eviction.
If you owe back rent and face the risk of eviction come October, you have a couple of options.
Landlords have struggled during the pandemic, too, and many have had to pay mortgages, utilities, and upkeep on their rental properties without receiving rental income.
Making a good faith effort to get caught up on payments is in your interest and theirs. They may see having some money coming in via a payment plan as being better than nothing.
Congress has authorized $46.5 billion in aid to help Americans keep up their rent and utility payments during the pandemic.
Unlike the economic stimulus payments the IRS sent directly to U.S. taxpayers, Congress sent rent relief money to state governments. The states have the authority to distribute the money to aid residents.
Some local governments send rental assistance money directly to landlords, while others give it to tenants as direct assistance.
To apply for a rental assistance program in your area, find your state on this list from the U.S. Treasury.
“No one should feel any guilt for using these programs to deal with recent troubles,”
Omer Reinor, REALTOR® and real estate investor
But keep in mind that rent relief isn’t guaranteed, nor is it a silver bullet. There have been reports of tenants being approved for rent relief, only to continue facing the threat of eviction because their landlords haven’t received the funds. Delays in processing or shortages of funds could mean that some deserving tenants don’t get approved for relief.
So apply for relief, by all means. But make sure to communicate early and often with your landlord as well. Let them know you are applying for relief and continue working on a plan to pay your full rent over time, regardless of whether you’re approved for federal funds.
Knowing that the moratorium is scheduled to expire in early October, think now about where you will go. The further ahead you can prepare, the better your chances of finding safe, sustainable housing.
Consider whether you have family or friends with whom you could live for a time. If you will need to rent a new place, save as much as possible for a security deposit. Unfortunately, many people who are evicted and have to find new homes quickly end up in subpar housing that demands high security deposits, especially if their credit has taken a hit while they were laid off.
An attorney there will be able to explain your rights under the eviction moratorium and when you’re served with an eviction notice. They can advocate for you and potentially help you stay in your home.
And if you are forced to move, they can advise you about your landlord’s responsibilities when it comes to maintain the property in which you live. Laws vary state to state, but it’s likely there are some local protections that require landlords to manage the upkeep and ensure the new building or house is up to code and safe.
Losing a job or facing eviction can be traumatic and emotionally painful experiences. But it’s important to remember that rent relief and Legal Aid resources are there for just these circumstances.
“No one should feel any guilt for using these programs to deal with recent troubles,” said Omer Reinor, a REALTOR® and real estate investor in Fort Lauderdale, Fla.
You can also contact your local housing authority about housing assistance and public housing options, and nonprofits that may be able to refer you to affordable renters or other financial relief programs.
The best case scenario is that you are able to pay your unpaid rent and stay in your current home, or that you can work out a payment plan with your landlord. Barring those options, though, know that you do have rights and that there are resources to help you.
Homeowners who cannot afford their mortgage payments are facing the threat of foreclosure, though they may be better positioned to avoid homelessness than renters because they can sell their homes.
Many have stayed in their homes -- at least for now -- thanks to a series of foreclosure moratoriums that are similar to the CDC’s eviction moratorium for renters.
In the earliest months of the pandemic, governors and state legislatures issued emergency orders to prevent lenders from following through on existing foreclosures, also in an effort to reduce community transmission of the virus.
Many of the initial state measures expired, but then another layer of foreclosure protection kicked in: eviction bans from some of the biggest players on the national mortgage scene.
Fannie Mae and Freddie Mac -- along with the Federal Housing Administration (FHA) and the U.S. Departments of Agriculture (USDA) and Veterans Affairs(VA) -- placed foreclosure-related evictions on hold until Sept. 30, 2021. As long as these moratoriums remain in place, you won’t be required to leave your home if it goes into foreclosure.
But you could still be foreclosed on for reasons other than missing your house payment.
"If the borrower breaks their contract in any way aside from late payments, such as misuse of the property or a shutdown of utilities for a certain duration, the lender can start legal lawsuits to evict the residents.”
Omer Reinor
Foreclosure can be emotionally and financially devastating, and your credit will suffer if your lender takes back your home. You want to avoid foreclosure at all costs, so if you are struggling with your payments, talk to your lender right away.
There are numerous relief options available to borrowers during the pandemic. Your mortgage servicer will work with you to determine what option applies to your situation This might include temporary forbearance, a payment plan, adding your missed payments onto the back end of your mortgage or a loan modification.
You can also check with your loan servicer about COVID-19 forbearance options.
“Forbearance is when a creditor allows you to pause your monthly payments for a period while you improve your financial situation,” said Laura Adams, a personal finance and real estate expert for the website Finder.com.
Loans backed by the FHA, USDA, and VA -- along with conventional loans that conform to Fannie Mae and Freddie Mac’s guidelines -- may also offer forbearance and payment reduction plans.
"[Forbearance] doesn’t mean your payments get eliminated or paused indefinitely. You must repay the missed payments.”
Laura Adams, personal finance and real estate expert for Finder.com.
With government-backed loans such as FHA, USDA, and VA loans, you may be able to get up to 18 months in forbearance. Non-insured conventional loans tend to offer up to three months in forbearance.
“For most loans in forbearance, you don’t have to pay fees, penalties, or additional interest beyond scheduled amounts,” Adams said.
“However, this doesn’t mean your payments get eliminated or paused indefinitely,” she said. “You must repay the missed payments. You may be able to repay them over time or when you refinance or sell your home.”
Although it doesn’t solve the issue of owing your back payments, COVID-19 forbearance will be worthwhile if it means you keep your home. The deadline for applying for forbearance with a government-backed loan is Sept. 30, 2021. There’s no deadline set for conventional loans, but you should check to see if your loan servicer itself has set a deadline.
“Your first step is to understand who owns your mortgage and if a federal agency backs it,” Adams said. “Then speak with your mortgage servicer or a HUD-approved housing counselor for help understanding all your mortgage relief options.”
If your mortgage isn’t backed by a federal agency -- or by an entity like Freddie Mac and Fannie Mae -- you’ll need to check with your lender about forbearance programs.
“Your lender may offer its own forbearance or other assistance if you speak with them about your financial situation,” Adams said. “While private lenders may not provide as much help, communicating with them before you go into default may increase their willingness to work with you.”
Forbearance isn’t the only relief you can find from mortgage payments you can’t afford. Refinancing your loan could also lower your payments. And you wouldn’t be putting off your payments until your forbearance period ends.
Refinancing hits the reset button on your mortgage, and with rates still hovering around historic lows, you may be able to lower your monthly payments through a refinance. You can also extend your repayment period by refinancing, which can also help lower your payments.
A streamline refinance program often provides the easiest path to a new home loan, especially if you have a lower credit score or have lost a job. Lenders might allow low credit score minimums and may not even need to check your current income.
FHA and VA streamline refinance options can help make these government-backed loans even more affordable, with less paperwork and an easier application process, and no appraisal requirement, saving you time and money.
If a streamline refinance loan is not an option for you, a standard refinance loan could still help lower your monthly payments.
Unlike a streamline refinance, a traditional refinance lets you replace your existing mortgage with any loan you qualify for. For example you could use a conventional loan to replace your FHA loan, or vice versa.
If you’re aiming to lower your monthly mortgage payment, stretching your loan across a longer term can make that happen.
For example, if you used a 15-year loan to buy a $300,000 home five years ago, your monthly payment is probably more than $2,000. If you refinanced your current balance of $240,000 over 30 years, your payment would go down to about $1,100 -- not counting taxes and homeowners insurance.
But there is a trade-off: You’ll pay more in interest over the life of your loan with a longer term.
Federal student loan repayments have been on hold throughout the pandemic. The current student loan forbearance period is set to end Jan. 31, 2022.
Until student loan forbearance ends, there’s no need to make loan payments on federal loans. You can make payments if you choose, but you’re not obligated to during the forbearance period.
Interest isn’t accruing on your balance during the COVID-19 forbearance period, so your balance isn’t growing while your payments are paused. That’s not always the case, though. The federal forbearance has a 0% interest rate. But if you were to apply for forbearance personally after the federal relief period ends, interest would continue to accrue even while your payments were suspended.
The government applied the COVID-19 forbearance automatically to all federal student loans, so there’s no need to contact your student loan servicer to take advantage of this relief.
The Consumer Financial Protection Bureau (CFPB) warns that if someone contacts you about putting your federal loans into forbearance, it’s likely a scam, especially if the person asks you to pay a fee. You do not need to apply for COVID-19 forbearance, and you do not have to pay for forbearance relief.
If you are unable to resume your student loan payments when the COVID-19 forbearance ends, you can apply for a personal forbearance or deferment of payments. You can also talk to your servicer about reducing your payment amounts through an income-based repayment agreement.
What if you can afford to make payments during the forbearance? Although you’re not obligated to make payments on federal student loans right now, it’s a good idea to put some money toward your loans if you are able. Because interest is not accruing, you can bring down your loan balance faster.
Note that COVID-19 forbearance is only for federal student loans. If you have student loans through a private lender, contact them directly to ask about forbearance, deferment, and other relief options.
There’s no direct connection between student loan debt and housing costs, but these two expenses will impact each other in your monthly budget, whether you’re renting or buying.
If you’re struggling to get back on track with rent or mortgage payments, you may be worried about how you’ll afford student loan payments once the forbearance and moratorium periods end.
Prioritize your housing situation, as it’s critical that you have somewhere safe and sustainable to live. But you may also want to apply for income-based repayment on your student loans, if you’re not in such a plan already.
The application accounts for your income as well as household size and housing payment, so you could get your student loan payments to a more manageable amount.
From shutdowns, to product shortages, to low interest rates, the coronavirus pandemic has turned the economy sideways.
Protections like the CDC eviction moratorium and mortgage forbearance plans have shielded millions of Americans from some of the pandemic’s worst economic trauma, though the uncertainty of what lies ahead can be difficult to cope with as well.
If you are worried about eviction or foreclosure, contact your lender and local housing authority now to learn more about your options. Being proactive will help you create a workable plan for staying in your home or transitioning to another form of safe, affordable housing.
Fairway is not affiliated with any government agencies. These materials are not from the VA, HUD, FHA, USDA, or RD, and were not approved by a government agency.
