Jun 4, 2021
When COVID-19 first slammed into the U.S. economy, most observers feared out-of-work homeowners would default on their mortgages by the thousands while millions of unemployed renters would be out on the streets.
More than a year later, the country’s housing market is volcanic, thanks largely to ultra-low mortgage rates. But while homeowners have seen the value of their houses surge, people who rent have not been so lucky.
Advertisement
Because so many of them work in industries clobbered by the pandemic, like hospitality and retail, many renters haven’t been able to earn a steady income in over a year. Millions are behind on their rent.
Thanks for subscribing!
Read the best of Moneywise in 5 minutes or less.
By signing up, you accept Moneywise Terms of Use, Subscription Agreement, and Privacy Policy.
If that describes your situation, don’t panic. Help is out there — in the form of $46.6 billion in federal COVID stimulus money.
What kind of help is available for renters?
Renters already have received some government help, including from a nationwide ban on evictions. But that expires June 30, so those with limited or no income to fall back on are understandably stressed.
Nearly 6 million renters owe approximately $20 billion in back rent, according to a new study from housing experts at the University of California, Berkeley, who warn that the nation may be headed for an "eviction cliff."
To help, Congress approved emergency rental aid in two stages: $25 billion as part of the pandemic relief bill that passed in December, and another $21.6 billion in the $1.9 trillion COVID stimulus bill President Joe Biden signed in mid-March. The U.S. Treasury is overseeing the distribution of the funds.
“The Treasury [Emergency Rental Assistance] program includes an unprecedented amount of funding for emergency rental assistance to help renters stay stably housed," says the National Low Income Housing Coalition.
The coalition's website is maintaining a list of nearly 400 rental assistance programs that are either open or set to open across the country to help get the federal money to people who need it.
Funding is available for renters who are struggling to pay rent or utilities because of the pandemic. If that describes the bind you're in, you should be eligible for help.
Advertisement
Must Read
- The ultra-rich use these 5 real estate strategies to build wealth while they sleep — you can start with just $100
- Here’s the average income of Americans by age in 2026. Are you keeping up or falling behind?
- Insurance companies profit most from drivers who auto-renew without shopping around. Comparing 100+ quotes takes 2 minutes and costs nothing
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
How to qualify for rental aid money
Tapping into the rental support hasn’t exactly been easy so far, but the application process was recently streamlined to make sure people in need are able to receive relief without unnecessary, anxiety-amplifying delays.
To be eligible, at least one member of your household must qualify for unemployment benefits, or must be willing to state, in writing, that the pandemic has been responsible for lost income or surging expenses that have made it difficult to pay rent.
You’ll also have to prove, through either a past-due utility or rent notice, that you’re at risk of homelessness. Plus, there's an income component: Your 2020 income must have fallen below 80% of your community’s median income.
You can find and apply to the appropriate local housing body through the website of the National Low Income Housing Coalition. Renters who qualify can get up to 18 months of assistance that will cover both missed and future rent.
Because many renters were hitting obstacles while attempting to access the aid, the Treasury Department recently made a key change aimed at smoothing out the distribution process.
The Treasury has told local agencies delivering the rental assistance that they should offer the money directly to renters, rather than going first to landlords. The department also has guided the local agencies to halt evictions of tenants for nonpayment of rent during the months they receive financial assistance.
What rental assistance looks like in some states
Advertisement
In many states, programs handing out the rental relief money are already well on their way to keeping renters in their homes.
The Illinois Housing Development Authority is administering a statewide $1.5 billion rental assistance program. Eligible tenants and landlords can apply for one-time grants of up to $25,000 to cover a maximum 15 months of missed rent from June 2020 to August 2021.
“The Illinois Rental Assistance Program is a testament to how good government can make a life-changing difference for people when our dollars follow our values,” Illinois governor J.B. Pritzker said recently while announcing details of the program.
In Texas, a program is covering unpaid rent and utilities going as far back as March 13, 2020, and providing assistance for rent and utility costs that are current or past due, plus up to two months of future rent and utilities.
Later, tenants can apply for another three months of aid if the program's coffers haven’t been scraped clean. The rental assistance available in Texas caps out at $4,600 per month.
And on Tuesday, New Yorkers were able to start applying for their state’s $2.7 billion emergency rental assistance program. Eligible households will receive up to 12 months for rent and utilities past due. If a household spends 30% or more of its gross monthly income on rent, it could receive three months of additional support.
Advertisement
You may be getting the impression that there's a lot of money to go around, but with millions of Americans in need of assistance, the $46 billion in relief could run out quickly. So, if you're behind on your rent, you'll want to get your application started pronto.
Carve out some breathing room on your own
The government’s rental assistance effort will undoubtedly be a game changer for many renters. But there are other ways you can ease the financial burden the pandemic strapped to your back.
If you’ve had to lean on your credit cards or other high-interest debt to cover your purchases during the pandemic, the interest charges will be stalking you and your budget for months. By rolling your balances into a lower-interest debt consolidation loan, you can pay off your debt more quickly and affordably.
You also might look into reducing your insurance costs. A little comparison shopping could help you save hundreds of dollars a year on car insurance.
And even though you're strapped for cash, it can be surprisingly easy to squeeze a little extra income out of the white-hot stock market. A popular app lets you invest in a diversified portfolio using just "spare change" from everyday purchases.
You May Also Like
- JP Morgan sees gold hitting $6,000/oz before 2027 — and a Gold IRA lets you hold the physical metal while deferring the tax bill. Get your free guide from Priority Gold
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
Clayton Jarvis is a mortgage reporter at MoneyWise. Prior to joining the MoneyWise team, Clay wrote for and edited a variety of real estate publications, including Canadian Real Estate Wealth, Real Estate Professional, Mortgage Broker News, Canadian Mortgage Professional, and Mortgage Professional America.
Mortgages • Mar 19
Mortgage applications are down as homeowners say ‘No thanks’ to refi savings
Banking • Mar 08
