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4 Rent Assistance & Mortgage Strategies for Landlords

Estimated reading time: 4 minutes

Even though the economy has reopened, many landlords are still facing rental shortfalls. As recently as this summer, the average renter in arrears was $3,700 behind on payments according to data cited by CNBC. The good news is that this hardship isn’t going unnoticed. There are a range of mortgage assistance solutions and rental assistance programs that may help you and your tenants with the pandemic’s effects. Here are few strategies to consider.

1. Explore rent relief programs for tenants and landlords

Rental assistance programs are available around the country and many may have gotten a boost. That’s thanks to the over $21 billion in rental assistance included in the American Rescue Plan Act which was signed into law in March 2021. In addition to helping with rent, funds from these programs may also help with utilities.

That said, it’s important to note that even if a program benefits renters, landlords may be able to apply on their behalf. Resources where you can learn more about available programs  include:

2. Negotiate temporary solutions with tenants

A second option that may help is making temporary arrangements with your tenants while their income is limited. According to Avail, a software company that caters to DIY rental property owners, options may include accepting:

  • Partial rent payments;
  • Security deposits in lieu of rent (check state and local laws on this);
  • Late payments with no penalties; or
  • Deferment of payments.

3. Refinance your mortgage

Refinancing your rental property’s loan may help you reduce its costs or boost your savings. Depending on your circumstances and loan type, refinancing can present a way to:

  • Lower your property’s monthly mortgage payment;
  • Liquidate some of its equity to create an emergency fund through a cash-out refinance* (note that cash-out refinances result in a higher mortgage payment); and/or
  • Take a brief break from monthly payments, depending on your loan’s closing date. As an example, if you close on your loan in January, your first payment likely won’t be until March, freeing up funds in February. Talk to a Mortgage Professional to learn more.

With mortgage rates near historic lows, it may also be an ideal time to explore this option but there are some disadvantages to keep in mind. These include added expenses, such as closing costs, though you may be able to include those costs in your loan. See our Refinancing Guide.

4. Request pandemic assistance

Pandemic forbearance is still an option for many property owners facing COVID-19 hardships, depending on the owner of your mortgage. There is currently no deadline to apply for an initial forbearance. Contact your mortgage servicer (the company you send your mortgage payment to) for more information on mortgage assistance solutions that may be available to you.

All in all, by making adjustments in the short-term, you may protect your property and any home equity you’ve built in the long-term. If you’re a Mr. Cooper customer, don’t hesitate to contact us to discuss your options. We’ll be here to help you and to keep you updated on mortgage assistance programs as they continue to develop.

*A cash‐out refinance increases your mortgage debt and reduces the equity you may have in your home. Your monthly mortgage payments may be higher. A debt consolidation refinance increases your mortgage debt, reduces equity, and extends the term on shorter‐term debt and secures such debts with your home. The relative benefits you receive from debt consolidation will vary depending on your individual circumstances. You should consider that a debt consolidation loan may increase the total number of monthly payments and the total amount paid over the term of the loan. To enjoy the benefits of a debt consolidation loan, you should not carry new credit card or high interest rate debt.

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