Advertiser Disclosure

advertising disclaimer
Skip to main content
Foreclosure notice with keys and gavel

HUD, Fannie Mae and Freddie Mac Suspend Evictions and Foreclosure

[Updated: Apr 29, 2020 ] Mar 20, 2020 by Maurie Backman
Get our 43-Page Guide to Real Estate Investing Today!

Real estate has long been the go-to investment for those looking to build long-term wealth for generations. Let us help you navigate this asset class by signing up for our comprehensive real estate investing guide.

*By submitting your email you consent to us keeping you informed about updates to our website and about other products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.

COVID-19 has been wreaking havoc on the U.S. economy ever since cases began multiplying domestically. In the past week, we've seen mass school closures, citywide restrictions, and large numbers of small businesses closing their doors. The result? Millions of Americans are now facing weeks without a steady paycheck, whether because they no longer have a job to go to or because they don't have the childcare that makes reporting to work possible.

Unfortunately, a large chunk of U.S. adults don't have the means to cover their living expenses in a situation such as this. Last year, the Federal Reserve Board found that 39% don't have enough cash in savings to cover an unplanned $400 expense, which means that in the coming weeks, countless renters and homeowners will likely struggle to pay their landlords rent or come up with their mortgage payments.

Thankfully, they won't run the risk of being kicked out of their homes in the process. On March 18, the Department of Housing and Urban Development (HUD) announced that it's suspending all evictions and foreclosures until the end of April in light of the current economic climate.

That same day, the Federal Housing Finance Agency announced that it's directing Fannie Mae and Freddie Mac, the entities that buy most home loans and make them available to investors, to do the same for a minimum of 60 days. These moves buy renters and homeowners a bit of breathing room during an otherwise stressful situation.

A bit of relief

Renters who miss a single rent payment and homeowners who miss one mortgage payment don't automatically get evicted or foreclosed on. But given that a large number of Americans might struggle in the coming weeks or months to make good on their housing payments, this is very good news. It's also good news for those renters who were in the process of getting evicted and for homeowners who were already on the verge of foreclosure.

That said, those who can't make their housing payments in the near term shouldn't just sit back and do nothing, as going that route could negatively impact their credit. Rather, renters who think they'll fall behind on rent should contact their landlords or management companies, explain the situation, and ask what options they have.

Similarly, homeowners who can't make their upcoming mortgage payments should reach out to their lenders. Many are allowing borrowers to hit pause on their payments temporarily, though it's worth noting that in many cases, interest will continue to accrue on those mortgages while they're in forbearance.

It's too soon to tell when the COVID-19 outbreak will be better contained and when Americans can get back to their normal way of living. But for now, it's nice to see that renters and homeowners alike are getting some breathing room as the country navigates one of the greatest challenges it's ever faced.

The "Unfair Advantages" of Real Estate Just Got a Whole Lot Better

Investing in real estate has always been one of the most effective paths to financial independence. That's because it offers incredible returns and even more incredible tax breaks.

These benefits weren't enough for Uncle Sam, though, as a new tax loophole now allows those prudent investors who act today to lock in decades of tax-free returns. We've put together a comprehensive tax guide that details how you can benefit from this once-in-a-generation investment opportunity. Simply click here to get your free copy.

The Motley Fool has a disclosure policy.