What happens if I can’t pay my rent or mortgage because of coronavirus?
Even in the time of COVID-19, the rent (or mortgage payment) is likely still due. That doesn’t mean you’d necessarily be facing eviction or foreclosure if you aren’t able to make your usual payment. If you’ve lost income due to COVID-19, you’re likely safe from being foreclosed on or evicted.
Federally backed properties — which includes those from Fannie Mae, Freddie Mac, the FHA, the VA and the USDA — cannot be foreclosed on, and their residents can’t be evicted due to the Cares Act. It’s essential to keep in mind that other supports, like forbearance, are not automatic through the act and must be requested. Many states have also put a temporary hold or ban on evictions and foreclosures to help stop the spread.
How regulations about missed housing payments have changed because of COVID-19
From a federal level, there have been several notable changes in how missed housing payments are treated. In general, evictions and foreclosures for those who live in or own federally backed properties have been temporarily suspended. Homeowners covered by the Cares Act have the right to request a forbearance on their loan if they’ve experienced sufficient financial hardship. That could be granted for a period of up to 180 days. After that, it may be renewed for up to an additional 180 days.
But there may be slight differences in how the CARES Act is carried out, depending on the lender:
- Those with multi-family mortgages from Fannie Mae and Freddie Mac will have a forbearance option if they agree to suspend evictions for their property. That eviction suspension would last as long as the forbearance lasts.
- Other Fannie Mae and Freddie Mac borrowers should still have access to this delayed payment option. Late fees would not be applied during this time, and foreclosure would be suspended.
- Those with an FHA-backed loan have a moratorium on evictions and foreclosures for 60 days, which began on March 18th, 2020.
Resources for missed mortgage or rent payments
If you find that you can’t pay your mortgage or rent payment due to financial hardship, you have options beyond the Cares Act.
- Contact a credit counselor to discuss your options.
- Consider taking out a home equity loan.
- See if your state or local government has provided additional protections against foreclosure, or has an emergency fund you can access.
- Look into refinancing your mortgage to lower your monthly payments.
- Make your landlord aware of your financial situation and discuss your options.
- Reach out to a non-profit or COVID-19 grant program for financial assistance (these may be based on things like location or vocation).
- Talk to a credit counselor for guidance.
- Check if your state or local government has enacted any protections against eviction or provided monetary aid for rent payments.
Each state has gone about offering mortgage and rent relief during the coronavirus crisis in slightly different ways, most with the same result of protecting renters and homeowners who have been impacted by the coronavirus.
State approaches to mortgage and rent relief during the coronavirus
- Alabama: According to a proclamation from the governor, rent and mortgage payments are still due but evictions and foreclosures are on hold.
- Alaska: The governor has directed the Alaska Housing Finance Corporation to suspend foreclosures and evictions. Those in the Alaska Housing Program may also be able to apply for reduced rent if they’ve been impacted. The state supreme court has halted eviction hearings as well.
- Arizona: The governor ordered a delay on the enforcement of evictions for renters, effective for 120 days from March 24. There is also a $5 million rental assistance fund from the Arizona Department of Housing. The department's foreclosure assistance program adds a level of protection for homeowners, with options for principal reduction, monthly mortgage subsidies for under- and unemployed Arizonans and second lien elimination assistance.
- Arkansas: The state has not provided additional COVID-related programs to help renters or homeowners.
- California: There is a statewide ban on evictions for renters through the end of May, 2020, for those impacted by the pandemic. Governor Newsom also brokered a deal with banks like Citigroup, JP Morgan Chase, US Bank and Wells Fargo, as well as nearly 200 state-chartered banks, credit unions and servicers to offer things like a 90-day grace period for all mortgage payments, relief from fees and charges for 90 days, no new foreclosures for 60 days and no credit score changes for accessing relief. Californians should contact their mortgage lender for more information, as this program is not guaranteed.
- Colorado: The governor has directed state agencies to work with property owners and landlords to help avoid evictions and foreclosures until April 30th, 2020. Rent and mortgage payments are still due.
- Connecticut: A statewide stay on evictions was in place through May 1, and foreclosure sales that were scheduled for March, April and May have been rescheduled to June 6, 2020. The governor also announced a mortgage relief program with select participating lenders which may give homeowners up to 90-day grace periods on payments, gives relief from fees for 90 days, prohibits new foreclosures for 60 days and prevents those individuals from experiencing negative impacts to their credit scores.
- Delaware: The governor and Delaware State Housing Authority introduced a program which provides up to $1,500 for those who need help to pay rent or electric bills due to COVID-19. There is also a statewide pause on evictions. Evictions and foreclosure proceedings have been halted until further notice. There is also a ban on late fees and interest charges for mortgages in foreclosure proceedings.
- Florida: Beginning on April 2, 2020, the governor suspended all mortgage foreclosures as well as non-payment evictions for 45 days. Rent and mortgage payments are still due.
- Georgia: There are no additional programs currently in place related to COVID-19 for either homeowners or renters.
- Hawaii: Evictions in the state have been suspended by the Hawaii Department of Public Safety Sheriff Division.
- Idaho: Most non-emergency hearings, including evictions, have been put on hold by the Idaho Supreme Court. The exception to this rule is for evictions based on the unlawful delivery, production or use of a controlled substance.
- Illinois: Evictions have been put on hold, per an order from the governor. Rent and mortgage payments are still due.
- Indiana: Evictions and foreclosures have been forbidden by the governor until the health emergency is over.
- Iowa: The governor has temporarily suspended foreclosures and most evictions in the state. Rent and mortgage payments are still due.
- Kansas: Banks and other lenders operating in the state have been prohibited from foreclosing on certain residential properties and certain renters cannot be evicted. In either case, however, this only applies if the reason for non-payment is related to financial hardship from the COVID-19 pandemic, per an order from the governor.
- Kentucky: Evictions in the state have been suspended per an order from the governor, but rent and mortgage payments are still due. Homeowners, however, have no additional protections from the state.
- Louisiana: Legal proceedings, including evictions and foreclosures, were temporarily suspended through April 30.
- Maine: Eviction cases were on hold through May 1, and foreclosure cases were not scheduled or heard during that time, by order of the state’s judicial branch.
- Maryland: The governor ordered a stop to new foreclosures in the state, and banned evictions for residential and commercial properties until the state of emergency is terminated. Existing evictions and foreclosures are also on hold until further notice.
- Massachusetts: Courthouses were closed until April 21, which effectively delayed evictions until that time. There’s also a $5 million fund intended to help those facing eviction, foreclosure, loss of utilities and other housing emergencies.
- Michigan: Evictions and foreclosures in this state have been put on hold because of the pandemic, as ordered by the governor.
- Minnesota: The ability to file an eviction action has been suspended for breached residential leases including non-payment. No additional protections have been enacted on behalf of homeowners, though the state’s Department of Health and Human Resources does provide financial support up to $2,000 for individuals facing foreclosure.
- Mississippi: Evictions in the state were suspended through April 20.
- Missouri: There are no state-level programs currently in place to protect either homeowners or renters.
- Montana: Foreclosures and evictions related to nonpayment were put on hold within the state through April 24, but mortgage and rent payments were still due. Renters were not subject to late fees, interest or other charges, penalties or amounts due because of nonpayment of rent during this time. There is also an emergency rental assistance program for those significantly impacted by COVID-19.
- Nebraska: The governor issued an order to prevent evictions for those significantly impacted by the pandemic. Rent payments are still due.
- Nevada: No additional evictions or foreclosures may be enacted, per a declaration of emergency directive from the state’s governor. Existing evictions and foreclosures (dated March 12, 2020 or earlier) are stayed until the state of emergency is ended.
- New Hampshire: The state has put a temporary stop to issuing and enforcing evictions and foreclosures, per an order from the office of the governor. Mortgage and rent payments are still due.
- New Jersey: There is a moratorium on removing individuals on the basis of eviction and foreclosure. The state has also made a deal with banks like Citigroup, JP Morgan Chase, US Bank, Wells Fargo and Bank of America to agree to provide relief for homeowners. For those who qualify and contact their lender, this can include a 90-day grace period for mortgage payments as well as relief from fees and charges during that time. It could also stop foreclosures for 60 days and preserve the borrower’s credit.
- New Mexico: The Supreme Court of New Mexico has issued a stay on nonpayment evictions.
- New York: New York has required state mortgage servicers to observe a 90-day mortgage relief option for those experiencing financial hardship, and to ensure that those homeowner’s credit would not be negatively impacted. Evictions have been suspended until June 19th, 2020, and courts are not accepting additional eviction or foreclosure cases at this time, according to the attorney general.
- North Carolina: Evictions in the state have been put on hold, as per direction from the Chief Justice of the state’s supreme court.
- North Dakota: Evictions have been suspended until further order from the state-level court.
- Ohio: The state has not implemented any binding laws which provide additional protection to renters or homeowners.
- Oklahoma: There are no state-level provisions for renters or homeowners at this time.
- Oregon: The governor has issued a stop to residential evictions due to nonpayment during the COVID-19 crisis, effective for 90 days starting on March 22, 2020.
- Pennsylvania: The state’s supreme court ordered that “during the period of judicial emergency, no eviction, ejectment or other displacement from a residence based on failure to make payment can be made,” effective through April 30.
- Rhode Island: Evictions have been suspended during the COVID-19 crisis.
- South Carolina: Existing eviction orders were put on hold until May 1, and no new applications for eviction were being accepted, with some exceptions if the case involves essential services or harm to person or property. Foreclosures also were on hold during this time, according to the Supreme Court of South Carolina.
- South Dakota: The state has not enacted any legislation to protect renters or homeowners from eviction or foreclosure at this time.
- Tennessee: The state's supreme court banned evictions, ejectment or other displacement from a residence through April 30.
- Texas: Evictions were put on hold until May 7, though new orders for evictions could begin to be accepted again on April 30, according to an emergency order from the state’s Supreme Court.
- Utah: Evictions have been effectively stopped for qualifying individuals, including residents who experienced loss of a job or wages due to COVID-19, are being compelled to quarantine or self-isolate or have contracted the virus and who were current on their rent as of March 31.
- Vermont: Nonemergency hearings, which includes evictions, were suspended by the Vermont Supreme Court, effective until May 31.
- Virginia: Evictions were banned until April 26, and for certain individuals, like those who live in Section 8 housing or whose landlord has a federally backed mortgage, the deadline is extended to July 25.
- Washington: The governor issued a moratorium on evictions through June 4. There is a rent freeze in effect, but rent will still be owed.
- West Virginia: The state supreme court suspended all non-emergency proceedings, like evictions, through May 1.
- Wisconsin: Evictions, eviction notices and foreclosure actions are prohibited for those who are unable to pay rent or mortgage payments. Rent and mortgage payments are still due.
- Wyoming: In-person proceedings in the state were suspended until May 31, which effectively protected individuals from eviction.
Be proactive and keep your home
If you think you might not be able to make your rent or mortgage payment this month, it’s always best to call your landlord or servicer to see if you can work out a deal and go over your available options. For example, states which have made deals with various banks and lenders may have included a coronavirus mortgage grace period, which may include fees. Just keep in mind that this grace period is not the same as payment forgiveness. It’s also worth inquiring if there are county- or city-level relief programs that can provide assistance or relief.
Devon Delfino writes for MoneyGeek. She is an independent journalist based in the Pacific Northwest. Her work has been featured in publications such as: the L.A. Times, Teen Vogue, Mashable, Business Insider, Forbes, MarketWatch, CNBC and USA Today, among others.