Housing assistance extended in the HEROES law


Abstract

  • The HEROES (Health and Economic Recovery Omnibus Emergency Solutions) law would provide around $ 200 billion in additional housing assistance.
  • The CARES (Coronavirus Aid, Relief, and Economic Security) law provides substantial financial assistance and legal protection to many tenants and mortgage holders, but these benefits are almost exclusively available to individuals, either in housing subsidized by the government. federal government or with a mortgage guaranteed by the federal government.
  • The HEROES Act extends and extends financial assistance and legal protections to virtually all tenants and mortgage holders, including prohibiting evictions or foreclosures for non-payment for up to one year.

introduction

Democrats in the House of Representatives introduced the Emergency Omnibus Health and Economic Recovery Act (HEROES) as the next step in responding to the coronavirus pandemic. The HEROES law considerably extends housing assistance for tenants and landlords, as well as for owners of rental properties and mortgage agents. The Coronavirus Aid, Relief and Economic Security Act (CARES), which roughly provided for $ 10 billion in direct housing assistance in the same way protections against eviction, foreclosure and forbearance worth billions of dollars, primarily provided assistance to families and individuals whose homes are somehow subsidized by the federal government, whether through public housing, a rent assistance or a mortgage loan guaranteed by the federal government. This help is broad – an estimate 70 percent of all mortgages are federally guaranteed, but not comprehensive, and the HEROES Act would extend federal housing assistance to virtually all tenants and mortgagees, either through additional direct financial assistance or by expanding legal protections.

Rental assistance

Most of the housing assistance provided for by the HEROES law is direct financial assistance to tenants. Specifically, $ 100 billion would be provided for emergency rent assistance for low-income tenants who could be at risk of eviction. In addition to paying rent, these funds can be used by tenants to pay utility bills, or by rental property owners to cover their costs. The HEROES law would provide this help by modifying the McKinney-Vento Homeless Assistance Act, a law dating from 1987 which provides assistance to accommodation programs for the homeless. The HEROES Act would modify the McKinney-Vento definition of “at risk of homelessness” to include all people earning no more than 80% of the median income in an area and having a disability or insufficient resources to maintain stable housing and pay. public services owed. to financial difficulties.

An additional $ 4 billion will be provided to public housing agencies for Section 8 rent assistance. $ 2.5 billion of these funds would be available to renew existing vouchers for tenants, while $ 1 billion would be spent on providing new vouchers, aimed at people who are homeless or at risk of becoming homeless, as well as those fleeing domestic violence. He is valued these funds would keep 2.2 million people in housing.

An additional $ 11.5 billion would be provided for emergency solutions grants to help cover housing and health-related services for the homeless.

There are nearly a million public housing units, and this law would provide $ 2 billion for the operation and management of these units. These funds would likely be used to increase cleaning and sanitizing practices to ensure tenant safety.

Increased funds would be made available to help specific groups, including $ 500 million for maintaining operations at housing facilities for low-income seniors, $ 200 million for properties providing housing for people with disabilities and $ 15 million for housing assistance for people with AIDS. Rural rent assistance programs will receive $ 309 million. Low-income families living in project housing would receive $ 750 million in rent assistance.

In addition, $ 100 million would be provided for housing advisory services, and $ 14 million would be provided to help enforce the requirements of the Fair Housing Act.

Finally, an additional $ 5 billion in funds would be provided for the Community Development Block Grant (CDBG), available for the next three and a half years with few restrictions on how the funds can be used. The CARES Law already provided $ 5 billion in additional funding for CDBG. The CDBG is a long-term program administered by the Ministry of Housing and Urban Development to finance economic development activities, including infrastructure and housing assistance.

All tenants would also be protected for up to 12 months against eviction solely for non-payment of rent. The CARES Act provided this protection to tenants of properties backed by federal loans.

Help for owners

Additional funds and legal protections would also be made available to owners. Specifically, the bill would provide $ 75 billion to state housing finance agencies to then make available to homeowners assistance with paying mortgages, property taxes and insurance, utilities. and other costs.

Beyond direct financial assistance, mortgage creditors would benefit from foreclosure protection for a period of 12 months and forbearance would automatically be granted for up to 60 days for any borrower who failed to make a payment for a period of 12 months. 60 days. If a borrower requests it, the forbearance must be extended up to one year. Homeowners would also benefit from bankruptcy protection, including ensuring that a homeowner is not excluded from the mortgage forbearance program created by the CARES Act due to bankruptcy; increase the amount of home equity protected in the bankruptcy process from $ 15,000 to $ 100,000; and expanding Chapter 13 bankruptcy eligibility by increasing the qualifying debt limits to $ 850,000 for unsecured debt (instead of $ 250,000) and $ 2.6 million for debt guarantees (instead of $ 750,000). (Chapter 13 is specially designed for people with low debt levels and is generally faster and allows people to keep certain assets, like a house.)

Mortgage agents and rental property owners

To take into account the millions of tenants and mortgage borrowers who are expected to be without rent for several months, this legislation would also provide assistance to banks and owners of rental properties whose incomes have been severely degraded. First, the HEROES Act would include mortgage agents as a counterpart to the $ 500 billion earmarked for Treasury and Federal Reserve relief facilities under Sec. 4003 of the CARES Act, subject to certain reporting requirements and borrower protections. Since CARES did not expressly exclude mortgage services from eligibility to participate in the Fed’s emergency lending facilities, it is unclear what additional liability this requirement transfers to the Fed. The HEROES Act goes further for owners of residential rental properties, directing the Fed to establish a bespoke emergency loan facility (using funds from the same section of the CARES Act) to provide debt relief. low cost emergency loans. As in CARES, beneficiaries of this assistance under HEROES would be prohibited from evicting tenants during the term of the loan.

Conclusion

The current pandemic and its economic consequences are severely affecting the ability of many people to pay their bills, and for most people their biggest monthly bill is housing. While the CARES Act already provided significant resources for housing assistance, much of these funds and legal protections were limited in scope, largely only available to people with federally guaranteed mortgages or living in housing. rentals supported by the federal government. The Heroes Act would provide many more resources and extend protections to virtually all tenants and mortgage holders.



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