Residents in This State Could Be in Line for $500 Million in Housing Stimulus Funds

Talk about a much-needed lifeline.

It's fair to say the U.S. economy has recovered nicely from the blow the pandemic dealt it back in early 2020. At this point, jobless levels have shrunk substantially and many people have managed to rebuild their savings after emptying out their bank accounts when the crisis first erupted.

But not everyone has managed to recover financially from the pandemic. In fact, a lot of people are still struggling to cover their basic living costs, especially in the wake of rampant inflation and soaring gas prices.

In Michigan, lawmakers are taking steps to address that issue. As part of a major $4.8 billion spending plan, lawmakers are allocating $500 million in funds for housing relief. And that could end up being a lifeline for residents at risk of losing their homes.

Previous rounds of assistance have expired

The COVID-19 outbreak had the potential to spur a massive wave of homelessness across the country. Thankfully, though, lawmakers stepped in to stop that from happening. The CARES Act, which was signed into law early on in the pandemic, allowed mortgage borrowers to hit pause on their home loan payments for up to 18 months via a process known as forbearance. Meanwhile, a federal eviction ban was put into place that barred landlords from removing tenants from their homes on the basis of not being able to come up with rent.

That eviction ban expired last year, though. And homeowners who sought out forbearance early on in the pandemic may have exhausted their 18 months of protection some time ago. A lot of people may still need help staying in their homes, whether they rent or own. The fact that Michigan is allocating funds for rent and mortgage assistance is therefore a positive development.

More housing help could soon be on the way

To be clear, the $500 million being allocated to housing relief is on top of the emergency rental assistance program Michigan already has in place. States began receiving federal funding for rental assistance programs in late 2020 and have since been tasked with making that aid available to residents.

Right now, Michigan is still taking applications for rent relief under that program, and both tenants and landlords in need can apply. Michigan residents can also, under that program, apply for assistance in covering utility costs.

But while that program may be of use to renters, it's not geared toward homeowners who may still be struggling to keep up with their mortgage payments. Michigan's new $500 million allocation might bridge that gap and help more property owners hang onto their homes.

A reason to be hopeful

Since Michigan's $4.8 billion spending plan is brand new, it's unclear how the housing assistance component will work, so residents may need to sit tight and stay tuned. But the fact that those funds have been carved out should give renters and homeowners a reason to stay positive during these trying times.