Help for the small investor in rental properties

While renters and homeowners have relief options for payments if they have been impacted by employment around the COVID-19 crisis, homeowners who rent apartments have been left holding the empty purses, in many cases. While large companies may not have the direct impact for several months, the small investor who may own one, two, or three rental houses – encouraged by many as a start towards the American dream – may be experiencing financial and credit burdens if tenants opt to not pay rents and the state and now the federal government prevents their eviction.

Homeowners can “defer” their mortgage for 3 mos and then extend that at least once, and perhaps twice, with no ill effects on fees or credit.

The small investor experiencing loss of rental income with no direct aid on the mortgages, taxes, and in some cases utilities brought us to RI Housing for a response. Key for relief will be if the mortgages are federally insured.

Here is what RI Housing advises for the small investor:

“The most important thing property owners can do if they are experiencing a loss of income due to COVID is to contact their servicer and to work directly with them to understand what options are available.

Certain federally insured mortgage holders may be eligible for mortgage forbearance under the Cares Act.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, puts in place two protections for homeowners with federally backed mortgages:

·        A foreclosure moratorium until December 31, 2020

·        A right to forbearance for homeowners who are experiencing a financial hardship due to the COVID-19 emergency.

If you don’t have a federally backed mortgage, you still may have relief options through your mortgage servicer. Contact your lender/mortgage servicer to discuss your options and inquire about any special programs and/or delayed payment options they may offer. Some lenders have rolled out mortgage relief programs for those who are unable to make their mortgage payments due to a decline in income. 

Landlords with tenants who are having trouble paying their rent can work with them to find resources that may be available to provide rental assistance. These include:

• Safe Harbor: Either landlord or tenant may apply. More information available here.
• Home Safe: More information available here. 

Owners of 1-4 unit properties who live in the property as their primary residence may also be eligible for mortgage assistance through the Hardest Hit Fund. More information on the program is available here.

For more information on COVID-19 related housing resources, property owners and tenants can go to RIHousing’s COVID-19 webpage at https://www.rihousing.com/covid-19/ or call 211.

This information was provided by Christine Hunsinger, Assistant Deputy Director External Affairs. [email protected]