Understanding New ‘disaster period’ Housing Market Protections
What many of us already know about the CARES Act is that it includes protective measures for individuals, small business, and governmental organizations. However, there is an important provision of this act that those concerned with the housing market should be familiar with.
The CARES Act takes precautions to dodge the misfortune experienced during the Great Recession- during which time the housing market imploded- by including protections for single-family homeowners, renters, multifamily building owners, and even prospective homeowners.
Mortgage forbearance and foreclosure protections are included
- Borrowers with federally-backed loans can request forbearance
- Up to 180 days of forbearance free of penalties, fees, and accumulating interest
- No proof required from borrower, only attestation to COVID-19-related financial hardship
Multi-family property owners receive similar protections
- All the same protections as homeowners
- These owners DO need to document financial hardship
- Can request forbearance up to 30 days, a period that can be renewed twice
Tenant protections are heightened
- No property owners participating in any housing program covered by various acts may begin to evict or charge late fees for rent to tenants
- low-income housing tax credit program, National Housing Act, Homeless Assistance Act, National Affordable Housing Act, rural housing voucher program and others are covered
Lastly, credit is further protected
- Amendments are made through the CARES Act to the Fair Credit and Reporting Act
- Will provide expanded leeway for borrowers to make arrangements with lenders regarding deferment of loans, partial payments, modifications, and forbearance.
- These agreed-upon arrangements will allow for credit agencies to verify borrows as current
Keeping these measures in mind will allow us to better navigate the housing market at this strange moment in history. Due to these amplified policies that aim to interweave a housing-safety-net, the housing market does feel a whole lot safer. We will continue to monitor the impacts of the CARES Act and the virus on the housing market. Now is the time to utilize your resources to best care for your families, communities, and yourselves!