There’s big news for Americans with roofs over their heads in the $2 trillion Senate coronavirus stimulus bill, a draft of which was provided to Slate on Wednesday morning: a 120-day ban on evictions for many renters, beginning on the day the bill passes, and a moratorium on foreclosures of up to six months for homeowners struggling to pay their mortgages.
A nationwide eviction halt would go some way toward averting a homelessness crisis on April 1, when rent comes due for the country’s 44 million renter households. Various studies have shown that many low-income Americans have almost nothing saved for a crisis, and as layoffs hit record numbers this month, even landlord organizations urged a forgiving approach.
According to the draft of the legislation, which is subject to change, landlords can’t begin eviction proceedings for tenants not paying rent or later charge “fees, penalties or other charges” related to nonpayment of rent.
That protection applies to tenants in buildings with federally backed loans or those in “covered housing programs,” including low-income housing tax credit buildings, rural housing vouchers, and other federal renter assistance. The Section 8 housing voucher program, which covers more than 2 million low-income families and is the U.S. government’s largest housing assistance program, is also covered.
If you’re a renter who’s not in one of those programs, you might want to find out what kind of financing was used to buy your building. According to a Congressional Budget Office report from 2015, 43 percent of multifamily mortgages have federal backing. That share is considerably higher in the single-family market (including apartment buildings with four or fewer units), where most renters live. If that’s you, the legislation’s tenant protections will buy you time.
The bill also calls for a two-month moratorium on foreclosures. Homeowners with mortgages backed by the Fair Housing Act (or securitized by Fannie and Freddie) who are having trouble making ends meet due to COVID-19 can ask for a 60-day hold on mortgage payments, which can be extended for four subsequent months. Banks can’t charge fees or interest for the withheld payments and must either come up with a repayment plan afterward or agree to extend the loan term. Banks must give borrowers notice of the provisions. At least in the short term, that will help forestall a wave of foreclosures like the one that haunted the Obama administration’s response to the Great Recession.
It’s still a draft, but it bodes well for not adding a housing crisis to the unemployment crisis, the pandemic crisis, and the other crises we’ve got going on right now.