Rep. Ilhan Omar (Photo by Kyle Mazza/Anadolu Agency via Getty Images)
Anadolu Agency via Getty Images
Ilhan Omar wants to cancel all your rent and mortgage payments due to Coronavirus.
Here’s what you need to know.
Cancel All Rent and Mortgage Payments
Rep. Ilhan Omar (D-MN) has proposed new legislation called the Rent and Mortgage Cancellation Act. The bill would institute a nationwide cancellation of residential rents and mortgage payments through the duration of the Coronavirus pandemic. Here’s how the bill would work:
- full payment forgiveness of rent For your primary residence
- full payment forgiveness of mortgage payments for your primary residence
- no accumulation of debt for renters
- no accumulation of mortgage debt for borrowers
- no negative impact on credit rating or rental history for mortgage borrowers or renters.
How It Works
As proposed, here’s how the proposed legislation works:
- This rent and mortgage cancellation applies to all type of existing rent or mortgage agreement on a primary residence residential unit (including sub-leases and room rentals).
- The rent and mortgage cancellation applies regardless of income, amount of rental payment or amount of mortgage payment.
- The suspension of rent and mortgage payments would be retroactive to March 13, 2020 and last for one year. Renters and mortgage borrowers would be reimbursed for payments made in April 2020.
- Participants who owe a mortgage and separately rent a residence can either receive mortgage relief or rental relief, but not both.
What about landlords and lenders?
If all rent and mortgage payments are forgiven, what about landlords and lenders? How do they get paid? Omar proposes that:
- The federal government (through the Department of Housing and Urban Development) would create a relief fund for landlords and a relief fund for lenders by which they can be reimbursed by the federal government for the lost rent and mortgage payments.
- Lenders and landlords can recoup their losses from rent and mortgage cancellation, so long as they agree to abide by a set of fair renting and lending practices for a period of five years;
- The federal government would create an affordable housing fund to finance the purchase of private rental properties by non-profits, public housing authorities, cooperatives, community land trusts, and states or local governments to increase the availability of affordable and low-income housing.
“The coronavirus crisis is more than just a public health crisis—it’s an economic crisis,” Omar said. “Minnesotans are losing jobs, getting their hours reduced, and struggling just to put food on the table. We must take major action to protect the health and economic security of the most vulnerable, including the millions of Americans currently at risk of housing instability and homelessness. Congress has a responsibility to step in to stabilize both local communities and the housing market during this time of uncertainty and crisis.