Biden admin's new eviction freeze protects some tenants, but landlords face 'very difficult time,' says expert
After the CDC instated its latest eviction ban, many landlords could be struggling to make their own monthly payments, but one expert says they have options. (iStock)
The Biden administration made the final extension to an eviction ban for those living in areas deemed by the Centers for Disease Control (CDC) as having "substantial and high levels" of coronavirus transmission. As a result, many landlords are reviewing their financial options because of unpaid rent from tenants who are struggling due to the pandemic – as they continue to make their own house payments.
"This is a very difficult time for landlords," JustAnswer lawyer Jessica Bober said. "It is important that landlords do not become overwhelmed by their frustrations and take matters into their own hands. Landlords are strictly prohibited from changing the locks or cutting utilities to the rental properties.
"In addition, landlords are still required to answer maintenance requests and maintain the properties," Bober said. "These would all be considered illegal evictions and could cause the landlord more delays in having the non-paying tenant removed and could also cost the landlord money."
Landlords having difficulty making monthly payments of their own due to missing rent might want to consider a mortgage refinance. Doing so while rates are at historic lows could help save money for renovations and help pay off debt faster. If you find yourself in the market for a refinance, you can use Credible's free online tool to research different mortgage refinance lenders and see what your loan options are.
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The new eviction ban has its limitations
Although some tenants are protected under the CDC's new eviction freeze, the ban is limited in its scope. The Consumer Financial Protection Bureau (CFPB) outlines steps renters should take if they are struggling to make their payments, and offers a list of requirements tenants must meet in order to qualify for the CDC’s ban. These requirements include earning less than $99,000 individually or less than $198,000 as a joint tax return filer in 2021, enduring coronavirus-related hardship like living in a county with a high virus transmission rate and having a financial hardship such as a significant decrease in annual income or a job loss.
When the previous eviction ban expired after Congress failed to pass an extension, several days passed in August before the CDC instated its moratorium. This meant that a tenant could not be evicted even if their landlord began the process during the lapse when the old ban expired and the new one began. Residents need to, however, complete a form explaining why their particular circumstances qualify them for the moratorium.
"The tenant also needs to file a response to the eviction court filing and attach a copy of their Moratorium Declaration to the response and file it with the clerk of court so that the judge assigned to the case is notified that the tenant is asserting protection under the moratorium," Bober said.
By refinancing and therefore lowering their own monthly payments, landlords can ensure they don’t fall into financial hardship. If you’re thinking of refinancing your mortgage, consider using Credible. You can use Credible's free online tool to easily compare multiple lenders and see prequalified rates in as little as three minutes.
Landlords have several options
"A common misconception of the moratorium is that landlords are forbidden from filing for eviction for all types of evictions," Bober said. "This is not the case. The moratorium only applies to evictions for non-payment of rent. A landlord may pursue an eviction if the tenant has violated the rules of rental agreement.
As landlords look to navigate the new CDC order's renter protections, they have several financial options at their disposal, including:
- Federal aid
- A mortgage refinance
- Selling the home
Federal aid: In many states, a landlord can apply for federal financial aid for a tenant in order to ensure they continue to receive monthly payments. Landlords can apply for assistance through the Treasury Department’s Emergency Rental Assistance Program.
"If a tenant is protected by the moratorium, it is in the landlord’s best interest to help and cooperate with the tenant in applying for rental assistance," Bober said.
There are a few factors that determine how much funding landlords and tenants can receive through the program, including income and location. The funding will then be distributed by state and local organizations and can be used toward rent payments, utility bills and moving costs.
Refinance: Landlords can also consider refinancing their home in order to save money on their monthly mortgage payments. This will allow them to have more flexibility and enable them to make their payments amid potentially missed rent payments from tenants.
Ahead of a refinance, it's important to keep in mind how much debt you have, what rates you qualify for and the mortgage terms you are looking to refinance to. Luckily, Credible makes it simple to compare mortgage rates. Click here to view today's featured refinance rates and view home loans based on APR, fees, and monthly payments depending on your loan amount.
Sell the home: In today’s highly competitive housing market, some landlords may be better off – and even make a profit from – selling the home.
"If a landlord simply cannot afford to maintain the property then they are allowed to sell the property, which more and more tenants are leaning towards due to the housing market being on fire," Bober said. "A landlord does not need to remove a tenant before selling. The new owner takes over the lease that is in effect."
Landlords can lower their monthly payments by refinancing their mortgage into today's low interest rates. You can too, and as a result you can achieve significant cost savings. Contact Credible to speak to a home loan expert and get all of your questions answered.
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