COVID-19 Updates- Your Rental Business
Eviction Moratoriums
We have alerted you to the local eviction moratoriums that have taken hold. Each court is rescheduling cases a little differently but statewide no new cases may be filed. As of now, this is the case until May 1. Unfortunately, the eviction hearings we had scheduled for mid-late March are currently rescheduled to mid-June! Clearly, for those of you with assets in this position, this will create further hardship. I hesitate to speculate but with all of the extra time tenants will be spending in a home that they know will have to be left in a few months, now is the time to also be prepared for potentially large turnover costs. I suggest the importance of getting prepared because when we are able to get possession, with an unknown economy, we should get these properties back on the market as quickly as possible. So, if you are in that position, lets get ready.
Rent Forgiveness Is Next
There is a movement building in larger cities where politicians are asking for rent forgiveness. This is partly occurring because provisions of the federal government's actions include mortgage payment deferrals. Like most political actions though, much more is involved.
There are so many issues with rent forgiveness that I am still pinching myself to think this could ever come to Central Indiana. If you own rentals in other markets though, you need to consider that this movement appears to have legs.
As a rental business owner, you may have never considered getting involved politically. While we all understand the plight of our tenants, we need to stay vigilant as politicians continue to gravitate to the ideas that have vocal support.
Housing Protections In The Stimulus Bill
If you have not heard from your accountant, there are some protections for residential owners in the CARES Act.
Forbearance Non-owner occupied mortgage borrowers (investors) with federally backed loans can request forbearance through their loan servicer during the designated disaster period that began March 13. These forbearance protections are for both owners of single family and multi-family properties with federally insured loans.
Federally insured loans are guaranteed or insured by the FHA, VA, Dept of Agriculture, or purchased or securitized by Fannie Mae or Freddie Mac.
Forbearance can last for a period of up to 90 days and provided in 30 day approvals with two renewals. No fees, penalties or interest beyond the amount already scheduled can be accrued on the borrower's account. Investors granted this forbearance also must agree to not evict or initiate eviction based on nonpayment of rent, nor charge any late fees during the forbearance.
Tenant Protections
If your property participates in any federal housing program (FHA, VA, Dept of Agriculture, or purchased or securitized by Fannie Mae or Freddie Mac) evictions can not be initiated or completed for 120 days. It is important that you let us know if your property might be included in this mandate.
Even with this federal law, remember ultimately the law will be enforced on a local basis and interpretation. The next few months will be very uncertain as it applies to collections for non-paying tenants.
WILMOTH Hardship request
As of April 3, we have 14 hardship requests out of 704 tenants. We are reaching out to you if we receive one from your tenant. That percentage seems low but we are hoping it reflects our placed tenant mix with medical professionals, delivery drivers, and construction trades providing a stable base. We also have increased our involvement in the government assistance (Sect. 8) programs. We remain hopeful that all of our tenants may avoid hardship through these difficult times.
Our policy is to let the tenant explain what they can do and not provide actual rent relief, but approve delayed payments and waiver of late fees. We all share the same goal of keeping tenants in our homes through this very difficult time.
Your WILMOTH Team believes an occupied rental is the best situation and will find creative ways to collect your rent on any schedule possible.
We pray you are healthy and finding new happiness in each beautiful day.
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