If you are someone struggling with your mortgage and housing expenses, there is little to worry about now. The United States Congress is offering a home stimulus program that is helping the homeowners pay off their mortgages.
Apart from the mortgage, you get the opportunity to pay the property tax and insurance bills if you are short on cash. The mortgage relief assistance is meant for people suffering a financial loss during the pandemic.
As per the American Rescue Plan, $10 billion was set aside for mortgage assistance. This fund is included in the Homeowners Assistance Fund to provide financial aid to homeowners to prevent late payments and delinquencies.
Here are a few things to know about the relief aid that will help you understand the stimulus program better.
Stimulus Check
Most people in the U.S. have received three stimulus checks to clear off their bills during the pandemic. With the implementation of the three checks, there is already discussion regarding the fourth check.
The American Rescue Plan involves a check of up to $1,400 for eligible individuals, $2,800 for married, and $1,400 for dependents.
The homeowner’s assistance fund is the recent stimulus package for the homeowners. Recently, Congress has even proposed the idea of $2000 monthly checks for homeowners until the economy is fully recovered.
The CARES Act
A $2 trillion stimulus bill under the CARES Act got passed in March 2020. The Coronavirus Aid, Relief, and Economic Security Act was enacted to control the aftermath of the economic downfall in the U.S. due to the pandemic.
It was formulated to help the homeowners struggling with finance clear their dues. These programs are designed to help you postpone your repayment and not refinance your mortgage.
Qualification for the Relief Program
To be qualified for the home stimulus program, you must own your residence. Additionally, you must have a mortgage balance of less than $548,250.
Following this, you are expected to contact the state housing agency to apply. A few states like New York have already developed a system for homeowners to start with the formalities.
Moreover, you should also prove the nature of the economic adversity like job loss, income reduction, and more.
The Mortgage Aid
The U.S. Treasury Department has planned to send money to states and distribute it through the state housing agencies.
The amount of aid per state is based on the number of late mortgage payments and foreclosures reported.
Mortgage Forbearance
The mortgage relief or the loan forbearance lets you pause your monthly mortgage payments when facing financial problems. The relief you receive is momentary as you are expected to pay back the loan and payments once you are financially stable.
The current forbearance plans you avail of can depend on the mortgage loan you still have. Once the forbearance plan ends, you will get few options to repay your missed loan payments.
With the spike in mortgage forbearance, you can now refinance your home loan with zero hassle.
Endnotes
The pandemic had gotten numerous Americans into the trap of financial struggles and crises.
The stimulus check programs have lent a helping hand to the people to pay their mortgages to clear their dues promptly.