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President Joe Biden announced a new mortgage relief program for homeowners with federal loans on Friday. Homeowners’ monthly mortgage could be reduced by up to 25%.
“[M]any homeowners will need deeper assistance due to pandemic-related income loss. For example, due to the economic crisis caused by the pandemic, some homeowners are earning less than they were before the pandemic,” the White House said in a statement.
“Homeowners with government-backed mortgages that have been negatively impacted by the pandemic will now receive enhanced assistance, especially if they are looking for work, re-training, having trouble catching up on back taxes and insurance, or are continuing to experience hardship for another reason.”
The federal moratorium on evictions will expire at the end of this month, but the government has made more than $45 billion reserved for at-risk renters and landlords available, and that will be distributed over years to come.
The first round of funding was appropriated in December and will not expire until September 2022. The $1.9 trillion American Rescue Plan made the second round of funding, worth $21.55 billion, available through Sept. 30, 2025.
Lawmakers have found fault with the amount of time that it has taken to distribute money for homeowners. According to the Department of Treasury, ERA grantees received $1.5 billion of relief in June. That was an 85% increase of grantees compared to May.
“This report confirms my concerns,” Republican Representative Patrick McHenry, a member of the House Financial Services Committee, said. “The Biden Administration is failing to provide Emergency Rental Assistance to Americans in need. With millions of families worried they’ll lose their homes in 10 days, we need to act now to correct this gross mismanagement. Republicans have a solution, the Renter Protection Act, to get this aid out the door. But instead of working with us, Democrats are more focused on their progressive agenda — leaving renters twisting in the wind.”
“This practice of renters incurring debt to avoid eviction is exactly the type of housing insecurity Congress intended to curb with the funds appropriated for the Emergency Rental Assistance Program,” Senators Alex Padilla and Diane Feinstein wrote in a letter to Treasury Secretary Janet Yellen. “To assist these households, we request that you update the Emergency Rental Assitance Program guidance to allow households to receive federal rental assistance for rent paid for with credit cards or other loans.”
“We appreciate the Treasury Department’s efforts to distribute the urgently needed rental assistance provided by Congress, and we hope to work with you to ensure renters who incurred debt are able to access these funds. Thank you for your attention to this important matter, and we look forward to your response,” Senators Padilla and Feinstein wrote at the end of the letter.
Homeowners can visit consumerfinance.gov/housing for up-to-date information on their relief options, protections, and key deadlines.
