How to get help
The $ 1.9 trillion pandemic relief bill that Biden signed in March – the measure featuring recent stimulus checks of up to $ 1,400 – has also provided nearly $ 10 billion in funding. direct financial assistance to help homeowners pay not only their mortgages, but also taxes, utilities, insurance and the homeowners association. rights.
Housing assistance – officially called the Homeowners Assistance Fund – is distributed to states based on a formula that takes into account the number of unemployed residents, late mortgage payments and foreclosures, according to the National Council. state housing agencies.
You can receive money if you own your home and your loan balance does not exceed a threshold set by Fannie Mae and Freddie Mac, the government-sponsored mortgage giants who buy or guarantee most loans. real estate in the United States. The loan limit for 2021 in most parts of the United States is $ 548,250.
Aid will be distributed to cash-strapped borrowers through public housing agencies. At least 60% of state grants must go to homeowners whose incomes do not exceed either the local median income or the national median income, whichever is greater.
States prepare to pay the money
The funds will be released to states by the US Treasury Department and must be used by September 30, 2025. The deadline for states to claim a portion of the $ 10 billion was April 25, and it is not clear how much. of them decided to take. benefit of the program.
Some states that have requested the money are moving forward with plans to release it to homeowners. Illinois Governor JB Pritzker said this week his state will provide $ 400 million in mortgage assistance to its residents.
The plan was part of a larger announcement that residents of Illinois can now claim up to $ 25,000 in rent assistance.
Meanwhile, homeowners with federally guaranteed loans were able to withhold payments for up to 18 months thanks to the government’s forbearance program. And, Biden extended a federal foreclosure ban until June.
In another effort to help, the Bureau of Consumer Financial Protection last month proposed a set of rule changes aimed at preventing avoidable foreclosures when federal protections expire.
Can’t qualify? Try to refinance instead
If you’re overwhelmed with housing expenses, but your income or loan balance is too high for mortgage relief in a pandemic, you have another possible recourse.
Now is a great time to refinance your mortgage, if you haven’t already.
At current mortgage rates – which recently rose slightly but remain historically low – mortgage technology and data provider Black Knight said some 13 million homeowners are well positioned to refinance and save an average of $ 283 per month.
According to Black Knight, the best refi candidates are 30-year mortgage holders who can reduce their current mortgage rate by at least three-quarters of a percentage point (0.75). 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 for a while, it’s easy to check your credit score for free.
Other ways for homeowners to improve their finances
When housing expenses pile up and are straining your budget, there are a few other methods to give you some financial wiggle room.
If you used credit cards for most of your shopping during the pandemic and are watching interest charges rise, you can replace those expensive balances with just one lower interest rate debt consolidation loan.
Or try lowering your home insurance premiums by looking for a better deal when renewing your policy. The same price comparison approach works well if you want to pay less for auto insurance.
Finally, the hot stock market could help you generate some extra cash for your mortgage payments. Seriously – it doesn’t take a lot of money. A popular app allows you to earn returns simply by investing your “spare currency” on your daily purchases.