The plan includes $ 27 billion in rent relief, $ 10 billion in mortgage payment relief and $ 5 billion to tackle homelessness.
While this unprecedented amount of aid will bring relief to millions of people, it will still not be enough to meet the continued need for housing assistance, said Diane Yentel, President and CEO of the National Low Income Housing Coalition .
There are 2.6 million homeowners currently on a forbearance program, which allows them to delay or postpone their payments according to Black Knight. At the end of January, about $ 19 billion in principal and interest payments were past due due to the pandemic, the mortgage data company said.
“The combined funding of this bill and the previous bill could clear most, if not all, of the arrears,” Yentel said. “But more will be needed to meet the lingering challenges.”
But there are other sources of rent relief in the new package that are more targeted. For example, $ 100 million has been set aside for people living in USDA-subsidized rural properties who are struggling to pay their rent.
For the homeless, the law provides $ 5 billion in emergency housing vouchers. Another $ 5 billion is earmarked for the creation of socially remote housing and non-collective shelters.
To deal with the increase in housing problems over the past year, the plan provides $ 100 million for housing advice and $ 20 million for fair housing organizations.
For those struggling to cover their utility costs, the stimulus package includes $ 4.5 billion for the energy assistance program for low-income homes and $ 500 million for assistance. water for low-income people.
Assistance to owners
Unlike previous recovery and rescue plans, which offered some protections to homeowners but no direct help, the American Rescue Plan offers $ 10 billion in direct financial assistance to struggling homeowners.
These funds are designed to help homeowners avoid foreclosures and catch up on mortgage, utility, property tax and insurance payments, said David M. Dworkin, conference president and CEO. National Council on Housing.
As the percentage of forbearance mortgages declines – it is now below 5% for the first time since last April, according to Black Knight – there are some 800,000 forbearance plans that will expire by the end of the month.
The American Rescue Plan Act also provides $ 39 million in assistance to low-income households who became homeowners through certain USDA mortgage programs and who fell behind on their payments during the pandemic.
What is not in the bill
Yentel said the moratorium on evictions needs to be extended so that billions in relief funds that have yet to be dispersed have the intended effect of supporting tenants who owe rent arrears.
âThere are landlords who refuse to participate in the program and watch the clock for three more weeks until they can evict their tenants,â she said.
“The order is flawed in that there is an alarming number of evictions occurring while it is in place,” she said. âCurrently, the protections are not automatic, we would like to see this changeâ.
“Although the stimulus will go a long way to alleviating the economic difficulties caused by the pandemic, the continuation of the moratoriums on evictions will have serious and negative consequences for the millions of” mom and dad “owners who represent 95% of the single-family rental home” said David Howard, executive director of the National Rental Home Council, which represents the single-family rental home industry.