HUD Offers Housing Relief for 60 days

HUD Offers Housing Relief for 60 days

WASHINGTON – An immediate moratorium on foreclosures and eviction was authorized for all Federal Housing Administration mortgages for a total of 60 days by the U.S Department of Housing and Urban Development.

This was announced on Wednesday, March 18th 2020, after much consultation with the Trump Administration, as well as the Coronavirus Task Force. This decision came amid the COVID-19 pandemic that is greatly affecting the lives of all Americans across the country.

In essence this would mean that if you currently have a Federal Housing Administration loan or mortgage, you wouldn’t have to make any payments towards it for a period of 60 days.

“Today’s actions will allow households who have FHA-insured mortgage to meet the challenges of COVID-19 without fear of losing their homes, and help steady market concerns. The health and safety of the American people is of the utmost importance to the department, and the halting of all foreclosure actions and evictions for the next 60 days will provide homeowners with some peace of mind during these trying times.”, said Housing and Urban Development secretary Ben Carson.

This serves to form part of an effort from the Trump administration to help reduce the severe financial consequences that the virus is imparting on all individuals and families.

The Federal Housing Commissioner Brian Montgomery said; “ This is an uncertain time for many Americans, particularly those who could experience a loss of income. As such, we want to provide FHA borrower households with some immediate relief given the current circumstances. Our actions today make it clear where the priority needs to be”

Considering that 1 in 5 Americans took out Federal Housing Administrated loans in 2019, this announcement will serve to play a massive part in providing some kind of financial relief to over 60 million people nation wide.

To date there have been a total of 436,159 confirmed cases of COVID-19 world wide, that have resulted in 19,648 deaths. Of this the United States has 55,081 confirmed cases, resulting in 785 deaths. The epicentre of the infection in the US lies in the economic capital of the country, New York City, with a total of 26,430 confirmed cases.

With such a widespread global pandemic, the dire effects on the economy are yet to be known, however currently there doesn’t seem to be much relief in sight. Hospitals are under equipped, and testing just keeps adding to the rising case numbers.

Many celebrities and people of influence are encouraging others to self-isolate, social distance and self-quarantine in an effort to flatten the curve of the spread. Of course this is an ideal situation to prevent further spread of the COVID-19, however what are the financial implications to those who aren’t financially able to take unpaid time off of work.

Of course this has been in great discussion and debate in senate, to work on a stimulus budget to help the nation’s people reside at home with peace of mind towards their financial situation. Senate has come to a record agreement of a $2 trillion dollar stimulus bill that is currently pending approval from congress. This came after days of intense discussion and debate amongst members of the senate and White House.

This comes at such a vital moment in time, as many Americans fear for the loss of their jobs, but are systemically being forced into lockdown or quarantine in an aid to slow the spread of the infection. Experts are estimating a record high level of unemployment that reached during the peak of the Great Depression in 1933.

James Bullard, President of St. Louis branch of the US federal reserve bank said that unemployment could reach 30% by the first quarter of this fiscal year.

To put this into perspective, the Great Recession otherwise known as the Lehman Shock, left the world’s economy plummeting, leaving the employment rate in the United States at a peak of 10.2%. To date the labor department reported a total of 281,000 Americans having filed for unemployment.

So besides the 60-day moratorium on FHA mortgage loans what else can you do to help you or people in your community?

Below we’ll explore two other avenues of help you might be eligible for;

1. Learn About Housing Vouchers (Section 8)

Housing vouchers come from the federal government’s main program in aiding low-income families, disabled and elderly to afford housing that is safe in the private market. This works to the individuals advantage in that the financial assistance is given to the individual or family, thus allowing them to choose their own form of housing. Whether it be an apartment, townhouse or single-family home as long as it meets the requirements of the program.

These housing vouchers are issued by Public Housing Agencies otherwise known as PHAs. PHAs are funded by the U.S Department of Housing and Urban Development. The PHA helps to regulate that the housing which the family chooses meets their regulations of health and safety.

How does it work?

Well, basically you and your family will search for housing of your choice, and make sure that it falls under the eligibility of the PHA’s requirements. The PHA will issue you housing vouchers to assist in the payment of the rent thus this usually requires the landlord or owner of the property to accept payment of rent under the terms of the program.

Am I eligible?

Essentially eligibility is determined by the Public Housing Agency, they work their calculations based on your gross annual income, how many individuals are in your family and what your residence status is. As a general rule the family’s gross income cannot exceed 50% of the median income of that area. Thus allowing it to vary across, city, county or state. You can find out your city or county’s income limits by contacting your local PHA.

How do I apply?

The best way to apply is to contact your local PHA or contact the nearest Housing and Urban Development office. Your PHA will need to compile information on your family and situation. They will need to collect the relevant information on your family composition, assets and income.

Once it has been verified, you will then be determined eligible if applicable, and be informed of the financial amount you will be eligible to for assistance. There is a waiting list, and this situation will differ in from region to region. Some lists are longer and in higher demand than others, which may cause the list to be closed entirely, so do take that into consideration when applying.

Are there local preferences?

Within the waiting list for housing vouchers there is the possibility of local preferences for selection. This will be established by the Public Housing Agency, in which they will give preference to some families before others. These preferences can be given such as the following:

  1. Families that are homeless or living in substandard housing.
  2. Paying more than 50% of their income to pay rent.
  3. Individuals that were involuntarily displaced.

Every PHA reserves the right to list local preferences based on the requirements of their local community.

How do the housing vouchers work?

Based on the PHA’s calculations of your family’s composition and income, you will be issued a voucher that will appropriately suit your family’s needs and requirements to live comfortably and safely. Whilst the PHA lets you choose your own housing, they do check that the unit issued in the voucher matches the unit of the property.

This allows them to ensure that their parameters and regulations for health and safety for the family are being appropriately met. Once the family has found housing of their choice and agreed on lease terms, the PHA will perform an inspection to check that the rent asked is appropriate to the state of the property at hand.

Generally the PHA will calculate a payment standard per unit (housing) in the area based on the average/standard. However this does not effect the amount of rent the owner or landlord may charge, thus it is up to the family to choose housing that sits either above or below the standard given by the PHA.

However if the rent lies above the payment standard the family will be responsible for the difference. The PHA’s voucher will offer payment of 70% of the payment standard for that unit.

So besides the moratorium that is currently in place, if you find yourself financially strapped and without housing this might prove helpful to you, or someone you might know. For further information please contact your local PHA or HUD office.

2. Understand Subsidised Housing

Besides the Housing Choice Voucher program (section 8) that we explored above, there are other options offered by the Housing and Urban Development department. We’re going to navigate these further below;

  • Privately owned subsidised housing

The HUD offers assistance by helping apartment or housing owners offer reduced rental payments to lower income families, you can search for apartments and book appointments at your local management office.

Public Housing

You can approach a PHA to look for affordable apartments. These are eligible for specifically elderly, disabled and low-income families. In order to inquire about this type of housing you’ll have to contact your local Public Housing Agency.

  • Local Renting Information

If you and your family are financially limited, requiring low-income housing, but also are in need of housing that is suitable to special needs, or disabled individuals. It can be quite a daunting prospect to even begin looking for what you need. The HUD offers counselling and assistance in this regard.

If you contact your local HUD or PHA office they can provide you with a directory of suitable housing options for you and your family. If you need advice but would prefer not to go to an office you can contact the following hotline (800) 569-4287.

If you’d like any further information on the assistance mentioned above you can go to your local municipal office, or access the U.S department of Housing and Urban Development website at https://www.hud.gov/. This should provide you with everything you might need to know.