What Happens When the Covid-19 Moratorium on Evictions Ends?

Back in March, it was hard to predict the devastating impact coronavirus and the lockdowns would have. Millions of people have seen their income dry up and are unable to pay rent. So, you probably breathed a sigh of relief hearing that your state placed moratoriums on evictions. But these are now coming to an end. And the threat of eviction could again be looming on the horizon. What happens when the coronavirus eviction moratorium ends? The HEROES Act proposes a 12-month moratorium on evictions during Covid-19. 

A glimmer of hope

If the Senate approves the bill, landlords couldn’t evict tenants for 12 months for non-payment of rent. Of course, you’ll still have to pay rent eventually. But help could be on its way to keep a roof over your head during the coronavirus mayhem.

Since lockdown and stay-at-home restrictions came into force in March, many businesses have closed. The result is that millions of Americans started claiming unemployment insurance for the first time. According to official data, the US unemployment rate in April was 14.7%. However, some recent reports at the end of May put the real figure closer to 24%. 

Even though most states have reopened and some people are getting back to work, that’s not true of everyone. So, how to pay rent during coronavirus is still a hot topic — especially if you’re still furloughed or claiming unemployment. No one wants to lose sleep over possibly having an eviction notice slapped on your door. 

Read on to find answers to your questions on what could happen to you when the coronavirus moratorium on eviction ends. You’ll also find out about the housing provisions in the proposed HEROES Act.

Related reading: Everything you need to know about the HEROES Act.

The HEROES Act and a 12-Month Moratorium on Evictions During Covid-19

The HEROES Act includes proposals to ban evictions for a further 12 months. The Covid-19 eviction moratorium would also include all residential tenants who can’t pay their rent — no matter what type of rental accommodation you have. This extension would take a lot of the anxiety about paying rent during the coronavirus pandemic

Under the CARES Act, the Covid-19 ban on evictions was great for many people, but not everyone. For example, the current rules about evictions apply only to housing with federally-backed mortgages. Also, the moratorium period was only for 120 days. At the present time, the risk of being served an eviction order is once again a real threat.

What else does the HEROES bill include to help you pay rent during the Covid-19 crisis? 

Although you still have to pay any rent due, landlords have to show forbearance. Your landlord can’t charge you late fees, interest, and — very importantly — report you to credit agencies for missing rental payments. 

The 12-month ban on evictions during Covid-19 also applies to homeowners. For example, say you can’t make mortgage payments because coronavirus annihilated your finances. Under the HEROES bill, you can apply for up to 360 days forbearance. During this time, banks can’t foreclose on your home just because you’ve fallen on hard times.

Another situation where the extended moratorium would help is for unemployed workers. At the time of this writing, a lot of people are able to pay rent or mortgages because, under the CARES Act, they get an extra $600 top-up on welfare. But this will soon end. Therefore, it may mean that you don’t know what happens when the extra cash dries up. An extended ban for 12 months on evictions gives you time to get back to work and make your rent payments again.

Other Housing Assistance in the HEROES Act Proposals

The House of Representatives passed the HEROES Act on May 15. However, it still needs to make its way through the Senate before it becomes law. In addition to proposing a year-long ban on coronavirus-related evictions, more help could be on its way to boost housing security.

Let’s look at what else the new bill proposes to secure housing. 

Emergency Rental Assistance

One of the HEROES bill’s objectives is to reduce the risk of homelessness — especially among the lowest earners. Additional funding would help hard-up folks pay their rent, utilities, and housing-related deposits. 

Homeowner Assistance Fund

Homeowners whose income has dropped to 80% of the Area Median Income (AMI) would also qualify for assistance. The extra financial help would make it easier for you to make mortgage payments, pay utilities, or property taxes. 

Tenant-Based Rental Assistance

The HEROES Act would allocate more money to help public housing and tenants who receive rental vouchers. Being able to pay rent during Covid-19 would increase housing security for families who’ve been hit the hardest.

More Financial Help During Covid-19

The HEROES Act also proposes several stimulus payments to help ease the impact of Covid-19. While these are not explicitly directed at housing, having extra cash will help pay your rent or mortgage. Here are a few highlights from the bill:

  • Second stimulus check — Most adults would receive a second stimulus check of $1,200. Up to three dependents in every household would get the financial boost. 
  • Extend unemployment benefits — Unemployed folks would continue to receive the extra $600 until the end of January 2021. The self-employed and gig workers who are jobless would keep receiving benefits through March 2021. 
  • Hazard pay for essential workers — People who are working on the frontline would receive an extra $13 per hour in their paycheck. This includes key workers, such as medical personnel, police, maintenance workers, grocery clerks, and postal workers.
  • Covid-19 testing and treatment — Under the CARES Act, everyone can get tested for coronavirus for free. However, the HEROES Act would ensure that Covid-19 patients get free medical treatment to treat the disease.
  • More funding for SNAP — More people could qualify for help paying for groceries under the SNAP program.

Covid-19 Moratorium on Evictions: A Takeaway

The coronavirus pandemic has left millions of people broke and unable to pay rent. The HEROES Act aims to give ordinary folks some financial breathing room to get back to work and pay their rent. Even though we’ll still have to struggle through the next few months, you don’t have to lose sleep about evictions if the new bill is approved.