How to Get Mortgage Relief for Landlords

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As COVID-19 continues to wreak havoc on the global economy, unemployment skyrocketed and rent payment has seen a major decrease. While Congress has passed bills to blunt the impacts, it did little to provide immediate relief. According to the Wall Street Journal, nearly a third of Americans had trouble paying their rent for April. As many states are coming up with temporary moratoriums to protect tenants from eviction during the difficult time, landlords and investors are caught in the crossfire. The best way to protect themselves is to get familiarized with government relief on mortgage payment and rent assistance. In this article we will walk you through tools that might help landlords navigate the immediate economic crisis as the world continues to fight coronavirus.

Tools at a landlord’s disposal when it comes to surviving the economic downturn includes government-backed mortgage forbearance, rent assistance, and others. To learn more about the details, read on.

Government-backed Mortgage Forbearance Programs

Single Family and 2-4 Unit Multi-family Properties

If your property is a single family house or a 2-4 unit multi-family property, and the mortgage is federally or GSE-backed (Fannie Mae or Freddie Mac), you are in luck. The newly passed Coronavirus Aid, Relief, and Economic Security (CARES) Act has languages that provide reliefs for landlords with those types of mortgage. First of all, your mortgage lender cannot start or proceed with a foreclosure on any underlying properties until June 30, 2020. Secondly, if you are experiencing financial hardship as a result of COVID-19, you may request and be granted a mortgage forbearance for up to 180 days, with the possibility for an extension for up to another 180 days. Additionally, once an agreement is reached with your lender on a modification of your loan, your lender cannot report you to the credit bureaus for not being current on your account.

5 or More Unit Multi-family Properties

Similarly, for mortgages with an underlying property of 5 or more units, the CARES Act provided protection for mortgage forbearance of a 30-day period, with possibility of two additional 30-day extensions upon request from the borrower. The multi-family relief also requires the borrower to be in good standing with the mortgage account as of February 1, 2020.

Rent assistance program 

As part of the CARES Act, Congress has allocated a $100 billion relief fund to support rent payment and other housing costs. It will be funded through local governments and non-profit organizations such as HopeLink. To help provide access to this relief, proactively reaching out to your renters who might be struggling to pay rent is always a good gesture and could result in a more positive outcome. Due to government requirements, many of those relief options require landlord participation, including filling out W-9 forms and providing current lease agreements. Having an open communication channel with the tenants is key to success in securing the much needed relief payment.

Local Relief Programs

Many local government agencies such as utility companies have come up with their own relief programs to help people weather the coronavirus storm. Check with your government COVID-19 information page for more information.

Selling to a Cash Buyer

Still in financial trouble after depleting those relief options? It might not be a bad time to sell! In recent years, a new generation of cash buyers has emerged on the market, they uses automated valuation models (AVMs) to evaluate the property value and offer to buy the property with cash for a quick transaction. While the traditional real estate market has slowed down due to COVID-19, the buying activities of these cash buyers have remained strong. Those are usually large scale buy-and-hold investors with deep enough pockets to survive the economic downturn and are turning the housing market slow down as an opportunity to build up a portfolio. BustOffer is the leading cash buyer network and its one-click solution matches your property to more than 100 cash buyers who are looking to buy properties nationwide with cash, regardless of occupancy status and condition. Submit your request today to receive multiple free, no-obligation offers.

Moving forward

With the unemployment rate hitting 20% in the US, the economy is likely to experience a slowdown for the medium term due to the global pandemic. For landlords, using the several relief options effectively could help them survive the downturn, for others, it might be the right time to get out of the real estate business and focus on the essentials.