Although there are signs that the coronavirus cloud is clearing over the U.S. economy, millions are still facing serious financial pressures from the pandemic, including the risk of losing their roofs over their heads.
To help, President Joe Biden’s COVID rescue package has allocated billions of dollars to states to be distributed to homeowners who are struggling to make their mortgage payments and keep up with other housing costs.
States that have applied for the money are preparing to distribute it. When you’re having trouble paying your mortgage, and yours Debts pile upYou may be eligible for part of the relief.
How do I qualify for help?
The $ 1.9 trillion pandemic relief bill signed in March that Biden signed in March – the measure that includes the latest bill Stimulus checks of up to $ 1,400 – Also provided nearly $ 10 billion in direct financial assistance to help homeowners pay not only their mortgages, but also taxes, utilities, insurance, and homeowners association membership fees.
Housing aid – officially known as the Homeowner’s Assistance Fund – is distributed to states that take into account a number of unemployed people, late mortgage payments and foreclosures, according to the National Council of State Housing Associations.
You can get money if you own your home and have a credit balance that doesn’t exceed a threshold set by Fannie Mae and Freddie Mac, the state-sponsored mortgage giants who buy or guarantee most U.S. home loans. The 2021 credit limit in most of the United States is $ 548,250.
The support is distributed through government housing authorities to borrowers with cash problems. At least 60% of government grants must go to homeowners with incomes that do not exceed either the local median income or the national median income, whichever is greater.
States are preparing to pay out the money
The funds will be released to states by the U.S. Treasury Department and must be used by September 30, 2025. The deadline for states to apply for a portion of the $ 10 billion was April 25, and it is not clear how many of them have chosen to take advantage of the program.
Some states that have requested money plan to pay it out to homeowners. Illinois Governor JB Pritzker said this week that his state will be providing $ 400 million in mortgage aid to residents.
The plan was in one wider announcement Illinois residents can now apply for up to $ 25,000 in rental assistance.
Meanwhile, with government-guaranteed loans, homeowners have been able to pause payments for up to 18 months through the government’s forbearance program. And Biden has extended a federal ban on foreclosures through June.
In another attempt to help, the Bureau of Consumer Financial Protection suggested a series of measures last month Rule changes aimed to prevent avoidable foreclosures when federal protection expires.
Can’t Qualify? Try refinancing instead
If you are overwhelmed by the cost of housing but your income or loan balance is too high for pandemic mortgage relief, there is another possible resource.
It is an excellent time for that Refinance your mortgageif you haven’t already.
At today’s mortgage rates – but which recently rose by the centimeter remain historically low – Mortgage technology and data provider Black Knight said around 13 million homeowners are in a good position to refinance and save an average of $ 283 per month.
According to Black Knight, the best refi candidates are 30-year-old mortgage holders who can save at least three-quarters of a percentage point (0.75) on their current mortgage rate. They should also have at least 20% equity in their homes and have credit scores of at least 720.
If you haven’t seen your score in a while, it’s easy to do Get a look at your credit score for free.
Other financial hacks for homeowners
When housing costs pile up and strain your budget, there are a few other methods you can use to create financial freedom.
If you’ve used credit cards for most of your purchases during the pandemic and are watching interest expenses escalate, you can replace those expensive balances with a single one Debt Consolidation Loans At Lower Interest Rates.
Or try to lower your homeowner’s insurance premiums around shop for a better deal when your policy is up for renewal. The same comparison shopping approach works fine if you want Pay less for car insurance.
After all, the glowing stock market could help you generate a little extra cash on your mortgage payments. Seriously – it doesn’t cost a lot of money. With a popular app, you can only earn returns through Invest your “change” from everyday purchases.