Short of money because of COVID-19? These utilities can help
There is a large list of federal and private aid programs out there to help US households affected by COVID-19.
The following are financial assistance programs currently available to US homeowners, renters, and those recently unemployed.
Note: The response to COVID-19 is constantly evolving. The programs listed here can change, expire or be expanded. This list is current as of December 10, 2020.
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CARES Act protection expires
Since March 2020 homeowners have
certain protective measures according to the CARES law (Coronavirus Aid, Relief and Economic)
These apply to anyone with a mortgage
supported by Fannie Mae, Freddie Mac or the federal government – including FHA,
VA and USDA loans. The most important protective measures are:
Homeowners can choose to do this
a forbearance plan that pauses the mortgage loan payments for up to 12 months if they do
Mortgage companies are experiencing financial hardship
Foreclosure proceedings against a homeowner cannot be made until December 31st
Note the expiration dates on
Government sponsored loans are
Currently only protected from foreclosure until December 31st
Fannie Mae and Freddie Mac extended the foreclosure moratorium to at
at least January 31, 2021.
For some government backed loans loans
Forbearance must be requested by December 31st. However, private banks and lenders can
Allow indulgence beyond this date – so it's worth asking your questions
Under these CARES Act protective measures
When it expires, the availability of mortgage relief will depend on whether Congress does or not
manages to adopt a new aid package. This had not yet happened at the time
How to apply for mortgage relief
Most help will only be available to those who ask for it. And
The organization you need to ask – at least initially – is your loan service provider. This is
the company to which you make your monthly mortgage payments.
You should work with your credit servicer to discover programs
that can help you.
Not all types of mortgages offer the same relief, and it can be
Be state or local help you can tap.
However, do not rely solely on the knowledge of the agent you are turning to
speak. Do your own research online. Below are some links. And
Google could be your friend.
"Loan servicer" versus "lender" – who to call
For help in moving or collapsing your
Mortgage payments or restructuring of your loan need to speak to your company
"Mortgage Service Provider." This is the company that collects monthly payments and
manages your account.
In many cases, this is not the same company as yours
Mortgage Lender or "Lender" – the company that started your business
Dig up your last mortgage statement. Whoever you
Submit your payment to the credit servicer. That's the number you should be calling.
Coronavirus mortgage assistance programs
The type of mortgage relief you may be eligible for depends on your type of loan and which bank or agency owns your mortgage.
Here are the utility programs currently available for the four major loan programs: Conventional, FHA, VA, and USDA.
Mortgage relief for conventional loans
(Fannie Mae and Freddie Mac)
Fannie Mae and Freddie Mac were the first to introduce utility programs for those affected by the coronavirus.
Many homeowners don't know
Your mortgages belong to Fannie or Freddie. You may not have noticed
One of them bought your loan after you closed. But you can easily find out
Using the search tool provided by everyone:
Make sure you use both tools.
Any agency could own your mortgage as it owns most of the US home
Provided that you agree with your lender about an aid package,
You might be standing in line for:
Mortgage Forbearance (reduced or no payments) for up to 12 months penalties and late fees are waived for issues covered by your forbearance. No reporting to credit bureaus about late or "missing" loan payments
Under the CARES Act, homeowners don't need to prove they are financially
Distress to get mortgage relief. That doesn't mean extensive
All homeowners need to do is "claim" that they are facing financial difficulties by sending a hardship letter stating that they have been affected by COVID-19.
These programs could provide some serious help. Just know that forbearance has both advantages and disadvantages.
Especially understand that Money that you don't pay now has to be paid later. You and your mortgage servicer should be aware of the timing and terms of repayment after your grace period has expired.
Homeowners protected under the
The CARES Act should not be obliged to repay missed payments in a lump sum
right when forbearance ends.
Instead, you can usually make larger payments until the missed amount is paid back, or defer repayment until your loan is paid off in full, or you refinance or sell the home.
Mortgage relief for state supported
Loans (FHA, VA, USDA)
Under the CARES Act, government-sponsored loans can also be made lenient.
Just like with traditional loans, those on government-backed loans just have to ask their lender for indulgence and write a letter stating that they are having financial difficulties as a result of the pandemic.
In this way, government-sponsored borrowers can get leniency
for up to one year (180 days plus an extension of 180 days).
This applies to:
FHA Loans VA LoansUSDA Loans
Remember that under the CARES Act, you still have to ask for indulgence. It is NOT automatically applied to loans. Again, you'll need to call your mortgage service provider.
Private mortgage assistance programs
Even if your mortgage is unsupported by the government, you may still have access to mortgage relief.
Many private mortgage lenders, large and small, have announced help for customers financially affected by COVID-19.
The American Bankers Association maintains a list of banks that have announced aid to their customers because of the pandemic.
Don't worry if yours isn't on this list. It may just have been neglected
the ABA to say. Call and ask.
When you call or go online, think about the new credit industry
unofficial slogan: "When people need help, just give them help."
It is never pleasant to share your suffering with a complete stranger. Now is the time to put such considerations aside. And in any case, don't wait for it to get bad.
Mortgage relief by the federal and state governments
If your loan belongs to Fannie Mae or Freddie Mac, you are
Protected from foreclosure until January 31, 2021. If your loan goes through the
FHA, VA or USDA are protected until at least December 31st.
Until that date, the law prohibits lenders and
Servicer from the beginning of judicial or extrajudicial foreclosure against you.
What happens after January 31, 2021? That belongs to everyone
suspect. Because by then, of course, a new administration will be set up. Lots
hope for further extensions or additional help at the federal level.
Some states have now introduced their own
Moratoria on evictions and foreclosures. And they can outlast covenants
Find out if your state or city has eviction bans.
Auxiliary programs for tenants
State eviction bans apply to both tenants and homeowners.
So there are some safeguards, albeit limited ones.
The National Low Income Housing Coalition has a search tool that tenants can use to find state and local assistance. However, you need to keep in touch with your landlord if you are having trouble paying your rent.
Call your landlord asap if the coronavirus means this
You are sick, laid off, or otherwise unable to pay your rent.
Remember: if you prevent payments, they will likely be considered due
As soon as coronavirus problems are over. So make sure you and your landlord are clear
to two things:
How to deal with missed or late rental payments during the COVID-19 pandemic How to get repayment for missed rents once the pandemic ends
If possible, obtain the agreement in writing.
Also, your state has conducted research to protect tenants and to ensure that your landlord is aware of these.
Find out if your state or city has eviction bans.
Unemployment benefit from the state
Some states have initiatives to help employers retain workers
who would otherwise be fired and would make life easier for those who were
and are unemployed.
Dismissed workers may be eligible for unemployment income. The amount of unemployment income to which you are entitled varies depending on the state.
At this point in time, Congress has not yet passed a second COVID aid package.
The bill currently under discussion could include an additional $ 300 unemployment income – but it does Not Include a second round of stimulus testing.
Visit your state government website to see what unemployment benefits are available where you are.
Should You Use Your Emergency Savings?
Many of us don't have emergency funds with us
all. If our income runs dry, we cannot make our next mortgage or rent payment.
Suppose you have a fund that offers you a pillow
for the coming months. There's no point in having one of these if you're not using it
when there is an emergency. The hint is in the name.
However, we are not sure how long
The economic impact of COVID-19 will continue.
You may want to expand your savings by getting the help of your lender and other organizations.
Tap the help that's available now and save as much money as possible in case it is needed later.
Mortgage modification scams
Unfortunately, some scammers see this as a national emergency
more of an opportunity than a tragedy.
The Consumer Financial Protection Bureau must already warn
Americans on Mortgage Modification Fraud. It says:
Ask them to prepay fees to receive services. Promise to receive a loan modification. Ask them to sign the title of your property. Ask them to sign papers that you do not understand. Say you should start making payments to someone other than your servicer or lender to make total mortgage loan payments
If someone has made any of these inquiries or claims, you can report that company by filing a complaint online with the CFPB or by calling (855) 411-CFPB (2372).
And the Federal trade
Commission reminds us, “The government is not going to call
to ask for your social security number, bank account, or credit card number.
Anyone who does this is a scam. "
It also warns of those who ask for some form of prepayment or promise to get you incentive money faster than normal. These are also frauds.
Trusted resources for
You will find a portal to numerous sources of information on COVID-19 on the Federal Government's website. Better to rely on them than on social media or even some media.
These resources include:
Your state's website likely has a similar page for local ones
Times are likely to remain tough
for many of us. But knowing where we really stand can make them easier to deal with
Whether you need mortgage relief or health confirmation
Be sure to choose sources you trust – and ask for help as soon as possible
You think you will need it.