The housing and mortgage industry welcomed yesterday’s announcement of a second round of stimulus payments to citizens, set at $600 per person and potentially arriving as early as next week, according to Treasury Secretary Steven Mnunchin.
But representatives also called on Congress to continue advocating for more federal aid, as the COVID-19 pandemic continues to keep people out of work and from making mortgage or rent payments.
The second stimulus bill – yet to be signed by President Trump – will include $25 billion in dedicated rental assistance, $600 in direct stimulus checks, $300 per week in enhanced unemployment benefits through March, extended unemployment programs for gig workers and long-term unemployed, and $284 billion for a second forgivable Paycheck Protection Program (PPP) loan.
The bill also extends the current CDC eviction moratorium until January 31, 2021 – a caveat that National Multifamily Housing Council (NMHC) President Doug Bibby and National Apartment Association (NAA) President and CEO Bob Pinnegar said does more harm than good.
“Eviction moratoriums fail to address a renter’s underlying financial distress and do not address housing instability,” Bibby and Pinnegar said in a joint statement. “The resources provided in this package, as well as future support that will need to be extended in 2021, are essential to addressing apartment residents’ financial challenges – not interminable moratoriums.”
Despite what many believe, Gen Z and Millennials do want to become homeowners and they’re excited by the prospect. As an industry, if we are willing to step into that advisory role, we can be more successful in helping prospective homebuyers become homeowners.
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Bibby and Pinnegar said the second stimulus bill is a positive step for the country.
“While there remains much work to do in the coming weeks and months, this effort is clearly a step in the right direction and will come as welcome news for so many households facing financial distress,” they said.
Dan Berger, president and CEO of the National Association of Federally-Insured Credit Unions (NAFCU), noted the replenishing of the PPP loan program and said the second stimulus bill as a whole is especially helpful for credit unions that have struggled during the pandemic.
“As well as simplifying the forgiveness process, providing more CDFI funds, and extending reforms to the Central Liquidity Facility and troubled debt restructuring requirements, [the bill] will help credit unions and their members continue to overcome the financial impact of the pandemic,” he said.
Renters have struggled mightily during 2020, in many cases relying on landlord payment options to avoid eviction proceedings. Landlords offered rent payment options to 64% of respondents, while 36% said they weren’t offered anything, according to data gathered by the National Association of Realtors (NAR).
The $25 billion set aside for rental assistance is crucial, said Mortgage Bankers Association President and CEO Bob Broeksmit.
“This [is an] important piece of legislation that provides the necessary tools to protect borrowers, renters, and small businesses,” Broeksmit said. “We especially appreciate rental assistance for tenants, and enhancements to the Paycheck Protection Program to help the hospitality sector.
“MBA commends Congress for passing this important piece of legislation that provides the necessary tools to protect borrowers, renters, and small businesses.”
Sunia Zaterman, executive director of the Council of Large Public Housing Authorities, echoed the sentiment that the second stimulus bill is long overdue. Zaterman said there is will be an estimated $70 billion in past-due rent by the first of January.
“This is why $25 billion is only a down payment on rebuilding the shredded social safety net that has been continuously underfunded for decades,” she said. “We know that those at greatest risk, especially during the pandemic, are low-income households.
“While we applaud action to deliver emergency rental assistance, we are alarmed by the months-long delay in the Senate to consider meaningful COVID-related relief. More assistance will be needed to avert crisis-level increases in evictions and homelessness.”
The legislation didn’t provide new forbearance timelines, nor did it aid residential servicers facing payment obligations on loans in forbearance. The second stimulus also didn’t offer much for homeowners of single-family properties, though the $600 payment may help some.
For homeowners who are having trouble making mortgage payments, forbearance rules are still in effect as part of the CARES Act. Regulators haven’t determined when loans backed by Fannie Mae or Freddie Mac will wind down forbearance. Homeowners with loans insured by the Federal Housing Administration are being asked to contact their servicer and request forbearance before Dec. 31.