by Maurie Backman | Feb. 11, 2021
If you missed a housing payment recently, here's what you need to know.
Many Americans have grappled with income loss during the coronavirus pandemic, and it's impacting their ability to keep up with housing costs. In fact, about 5 million Americans skipped either a rent or mortgage payment in December, according to the Mortgage Bankers Association’s Research Institute for Housing America. That means more than 5% of all U.S. renters and homeowners didn't make a payment. It also means many Americans should be taking steps to seek relief.
The coronavirus relief bill that passed in late December included $25 billion in rental assistance. If you've lost income during the pandemic and are at risk of homelessness, you may be eligible to apply for relief. The best way to begin is to contact your state's housing department for more information. If you qualify, you may be eligible for up to 12 months of back rent and utilities, plus another three months' worth if there's money left over in the program.
Meanwhile, there's an eviction moratorium in place through March 31, so between now and then, your landlord can't kick you out of your home just because you missed a payment. But what you should do is talk through your situation with your landlord and see if you can reach an agreement. Your landlord may accept partial rent payments for a period of time, which could enable you to stay in your home once eviction bans are lifted.
If you own a home and are unable to pay your mortgage, you can ask to put your loan into forbearance. Contact your loan servicer and say that you're experiencing a hardship and need relief -- it's really that simple, because right now, you can't be denied forbearance if you ask for it and your loan servicer cannot demand proof of your hardship.
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With forbearance, you can pause your monthly mortgage payments for up to 360 days. During that time, you won't be reported as delinquent on your payments to any of the credit bureaus, and you won't be charged late fees by your loan servicer.
Once your forbearance period ends, you will need to catch up on those missed payments, whether by paying a higher amount each month or extending your loan's repayment period. The specifics of how you catch up will depend on your loan servicer, but you can't be required to catch up in a single lump sum as soon as your forbearance period ends.
You're also allowed to partially pay your mortgage while your loan is in forbearance, which would minimize the amount you need to catch up on afterward. For example, if you can pay your mortgage in full every third month during forbearance, that's allowed.
Right now, there's a foreclosure moratorium in place through March 31, so if you fall behind on your mortgage, you won't risk losing your home right away. But if you're struggling to pay, it's a good idea to look at forbearance. Like the ban on evictions, the foreclosure ban will eventually lift, and entering forbearance could buy you more flexibility in case your financial circumstances don't quickly improve.
Whether you own a home or rent one, it pays to seek out as much relief as possible. It may take some time for your personal finances to recover after the pandemic, so until that happens, make sure to take advantage of the coronavirus aid that's available to you.
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