COVID-19 stimulus programs for homeowners and renters [Updated for 2021]

Peter Warden
The Mortgage Reports editor

Money tight because of COVID-19? These relief programs can help

There’s a large list of government-sponsored and private relief programs to help U.S. households affected by COVID-19.

Below are financial aid programs currently available to U.S. homeowners, renters, and those who have recently become unemployed.

Note: The response to COVID-19 is constantly evolving. Programs listed here may change, expire, or be extended. This list is current as of January 20, 2021.

In this article (Skip to…)

Important deadlines for mortgage relief

Since March 2020, homeowners have had certain protections under the CARES Act.

These measures, which apply to loans backed by Fannie Mae, Freddie Mac, or the federal government, include:

  • Homeowners may opt into a forbearance plan, pausing mortgage loan payments for up to 12 months, if they are experiencing financial hardship
  • Mortgage companies cannot start foreclosure proceedings against homeowners who are unable to make home loan payments

Originally due to expire on December 31, 2020, many of these programs have been extended through the start of the new year as COVID continues to take its toll.

If you need to seek mortgage relief, here are the current deadlines you should be aware of:

  • If you have a conforming mortgage, backed by Fannie Mae or Freddie Mac, a lender or servicer cannot start foreclosure proceedings against you until at least February 28, 2021
  • If you have an FHA, VA, or USDA mortgage, you’re protected from foreclosure until at least February 28, 2021

Some homeowners with federally-backed loans can also make an initial request for loan forbearance up to February 28, 2021.

However, this may vary by loan type — FHA, VA, or USDA — and loan servicer. So check with yours to see how much time you have to submit a forbearance request.

Read on to learn more about how loan forbearance works and how to request mortgage relief if you’re experiencing financial hardship.

How to request mortgage relief

Most help will be available only to those who ask for it. And the organization you need to ask — at least, at first — is your loan servicer. That’s the company to which you make your monthly mortgage payments.

Note: Your mortgage servicer is likely not the same company that set up your loan. To find out who your servicer is, check the company name and contact information on your most recent mortgage statement.

You should work with your loan servicer to discover programs that may help you. 

Not all types of mortgages offer the same relief, and there may be state or local assistance you can tap. 

But don’t rely solely on the knowledge of the agent to whom you speak. Do some research of your own online. You’ll find some links below. And Google could be your friend.

Coronavirus mortgage relief programs 

The type of mortgage relief you may be eligible for depends on your loan type and which bank or agency owns your mortgage.

Here are the relief programs currently available for the four major loan programs: conventional, FHA, VA, and USDA.

Mortgage relief for conventional loans (Fannie Mae and Freddie Mac) 

Fannie Mae and Freddie Mac were the first to unveil relief programs for those affected by the coronavirus. 

Many homeowners don’t realize their mortgages are owned by Fannie or Freddie. You may not have noticed that one of them bought your loan after you closed. But you can easily find out using the lookup tool that each of them provides:

Be sure to use both tools. Either agency could own your mortgage as they own the majority of U.S. home loans.

Providing you agree with your lender on an assistance package, you could be in line for:

  • Mortgage forbearance (reduced or no payments) for up to 12 months
  • Penalties and late fees waived on issues covered by your forbearance agreement
  • No reporting to credit bureaus about late or ‘missing’ loan payments
  • Loan modifications that could allow you the same or lower monthly payments when things return to normal

Under the CARES Act, homeowners do not have to prove that they’re in financial distress in order to get mortgage relief. That means no extensive documentation. 

Homeowners simply have to “claim” they’re going through financial hardship by sending in a hardship letter saying they’ve been affected by COVID-19. 

These programs could offer serious help. Just be aware that there are both pros and cons to forbearance

In particular, understand that any money you don’t pay now will have to be paid later.

You and your mortgage servicer should be absolutely clear about the timing and terms of repayment once your forbearance period ends.

Homeowners protected under the CARES Act should not be required to pay back missed payments as a lump sum right when forbearance ends.

Instead, you can usually opt to make larger payments until the missed sum is repaid, or ‘defer’ repayment until your loan is fully paid off or you refinance or sell the home.

Mortgage relief for government-backed loans (FHA, VA, USDA)

Mortgages backed by the federal government are also eligible for loan forbearance. This includes:

  • FHA loans
  • VA loans
  • USDA loans

Just like for conventional loans, those with government-backed loans simply have to ask their lender for forbearance and send in a letter stating they’re going through financial hardship as a result of the pandemic. 

In this way, government-backed loan holders can get forbearance for up to one year (180 days, plus one extension of 180 days).

Remember, you have to ask for forbearance. It will NOT be automatically applied to any loans. Again, you need to call your mortgage servicer.

Private mortgage relief programs

Even if your mortgage is not government-backed, you may have access to mortgage relief.

Many private mortgage lenders, big and small, have announced help for customers who are financially affected by COVID-19.

The American Bankers Association maintains a list of banks that have announced help for their customers over the pandemic.

Don’t worry if yours isn’t on that list. It may have just neglected to tell the ABA. Call and ask.

When you call or go online, remember the lending industry’s new unofficial slogan: “When people need help, just give them help.” 

Foreclosure moratoriums

If your loan is owned by Fannie Mae or Freddie Mac, you are protected from foreclosure until February 28, 2021.

If your loan is backed by the FHA, VA, or USDA, you’re also protected until at least February 28, 2021.

Until that date, the law prohibits lenders and servicers from beginning a judicial or non-judicial foreclosure against you.

What happens after February, 2021? That’s anyone’s guess. Because, of course, a new administration will be in place by then. Many are hoping for further extensions or additional help at the federal level.

Meanwhile, some states have also introduced their own moratoriums on evictions and foreclosures. And they may outlast federal protections.

Find out if there are eviction bans in your state or city.

Relief programs for renters

The new coronavirus relief bill, passed on December 28, includes protections for renters. Under the new law:

  • Renters cannot be evicted until at least January 31, 2021, if they are behind on payments due to COVID-related financial hardship
  • $25 billion in rental assistance will be available through state and local governments to help renters who can’t make payments

To qualify for rent relief, tenants will have to meet certain conditions, including:

  • The household can’t make more than 80% of their area’s median income
  • Renters must be experiencing financial hardship related to the pandemic
  • The renter must be at risk of losing their housing

Since funds will be distributed locally, tenants and landlords hoping to qualify for relief will need to check relief programs operating in their area.

For starters, check this spreadsheet of local housing programs, compiled by the National Low Income Housing Coalition, to find rental assistance programs currently operating in your state or county.

What to do if you’re behind on rent

The National Low Income Housing Coalition has a lookup tool that can help renters find state and local assistance. But you must still keep in touch with your landlord if you’re having trouble paying your rent.

Call your landlord ASAP if the coronavirus means you’re sick, laid off, or otherwise unable to pay your rent. 

Remember: If you forestall payments, they’ll likely be due as soon as coronavirus troubles pass. So make sure you and your landlord are clear on two things: 

  • How to handle missed or late rent payments during the COVID-19 pandemic
  • How repayment for missed rent will be handled once the pandemic ends 

Get the agreement in writing if possible. 

Also, research measures your state has enacted to protect renters and make sure your landlord is aware of those. 

Find out if there are eviction bans in your state or city.

State and Federal unemployment assistance

Some states have initiatives to help employers retain workers who’d otherwise be laid off, and to make lives easier for those who have been and are unemployed.

Laid-off workers may be eligible for unemployment income. The amount of unemployment income you’re eligible to receive varies by state.

Visit your state government’s website to see what unemployment assistance is available where you are.

Those who collect state unemployment should also be eligible for an additional $300 per week in federal unemployment income, thanks to the new stimulus bill recently passed by Congress and President Trump.

As of this writing, the additional $300 will be available for 10 weeks — until March 14.

Should you tap your emergency savings?

Many of us have no emergency funds at all. If our income dries up, we won’t be able to make our very next mortgage or rent payment.

But suppose you do have a fund that provides you with a cushion for months to come. There’s no point in having one of those if you don’t use it when there’s an emergency. The clue’s in the name.

However, having said that, we’re as yet unsure about how long the economic effects of COVID-19 will last. 

You may wish to stretch the savings you have by taking advantage of assistance available from your lender and other organizations.

Tap the help that’s available to you now, and save as much of your emergency cash as you can in case it’s needed down the road.

Mortgage modification scams

Unfortunately, some con merchants see this national emergency as an opportunity rather than a tragedy. 

Already, the Consumer Financial Protection Bureau is having to warn Americans about mortgage modification scams. It says:

Scammers may:

  • Ask you to pay fees upfront to receive services
  • Promise to get you a loan modification
  • Ask you to sign over the title to your property
  • Ask you to sign papers that you do not understand
  • Say you should start making payments to someone other than your servicer or lender
  • Tell you to stop making mortgage loan payments altogether

If anyone has made any of these requests or claims, you can report that company by submitting a complaint with the CFPB online or by calling (855) 411-CFPB (2372).

And the Federal Trade Commission reminds us: “The government will not call to ask for your Social Security number, bank account, or credit card number. Anyone who does is a scammer.” 

It warns equally against those asking for any form of upfront payment or promising to get you stimulus money quicker than normal. Again, those are scams.

Trustworthy resources for COVID-19 information

The federal government’s website has a portal to numerous sources of information on COVID-19. Better to rely on them than social media or even some media outlets. 

Among other things, these resources include: 

Your state’s website likely has a similar page for local services.

Times are likely to remain hard for many of us. But knowing where we truly stand can make dealing with those easier. 

So whether you need mortgage relief or reassurance about health matters, be sure to choose trustworthy sources — and to ask for help as soon as you think you’re going to need it.