Because of the COVID-19 pandemic, a lot of Americans are struggling to pay for their mortgage. To help ease this burden, US President Joe Biden has announced the Mortgage Stimulus program. In a way, this program is similar to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, though it is particularly designed to provide homeowners with forbearance on their mortgage payments.
Now, if you are interested in taking advantage of this program too, you might be wondering how to go about it. Well, you are in the right place. Here, we will explain to you in detail what Biden’s Mortgage Stimulus program is and offer some information on how to apply for it.
Joe Biden’s Mortgage Stimulus Program
What Is the 2022 Mortgage Stimulus Program?
Biden’s Mortgage Stimulus (Homeowner Assistance Fund) program is a federal government initiative that was created in response to the COVID-19 pandemic. Specifically, the program provides homeowners with forbearance on their mortgage payments, which means that they can temporarily stop making payments or reduce the amount of money they pay for their outstanding mortgage loans.
Like any other stimulus program, Biden’s Mortgage Stimulus program has its own share of eligibility requirements that homeowners must meet in order to qualify. And, failure to meet any of these requirements will automatically disqualify the applicant from the program.
So, what are these eligibility requirements? Let’s take a look.
Who Qualifies for the Mortgage Stimulus Program
To be eligible for this government mortgage relief program, you must meet the following criteria.
1. Be a Homeowner with a Federally Backed Mortgage
First and foremost, you must have an outstanding mortgage with lenders that are backed by the federal government. These include the Federal Housing Administration (FHA), the Department of Housing and Urban Development (HUD), the Department of Veterans Affairs (VA), and the United States Department of Agriculture (USDA). Apart from these four agencies, the Federal Housing Finance Agency (FHFA) also provides similar relief which is backed by Fannie Mae and Freddie Mac.
The good news is that most lenders in the country offer federally backed mortgages. But if you are unsure about your mortgage status, you should reach out to your lender and inquire about it.
2. Have an Outstanding Mortgage Loan That Was Originated on or Before January 31, 2020
The second eligibility criterion is that your mortgage must have originated on or before January 31, 2020. In other words, you must have taken out your loan before February 2020 in order to qualify for this program.
To determine the date when you took out your mortgage loan, you can check your mortgage statement or contact your lender for clarification.
It’s also important to note that refinanced mortgages are not eligible for this program. So, if you refinanced your home after taking out the original mortgage loan, you will not be able to take advantage of Biden’s Mortgage Stimulus initiative.
3. Be Behind on Your Mortgage Payments
In order to qualify for the program, you must have missed at least one mortgage payment between February 2020 and onwards. If you have not missed any payments during this time period, then you will not be able to apply for this initiative.
And again, homeowners who are currently in forbearance are still eligible for this program. So, if you are struggling to make your mortgage payments, you should reach out to your lender and know about your forbearance options.
4. Be Experiencing Financial Hardship Due to the Pandemic
This program was initially created to help those who are struggling financially due to the COVID-19 pandemic, so it’s only natural that one of the eligibility requirements is proof of financial hardship that resulted from the crisis.
Now, what counts as a financial hardship?
In general, any type of job loss or income reduction caused by the pandemic can be classified as financial hardships. These include things like being laid off, furloughed, or having your hours reduced at work.
Additionally, if you are self-employed and your business has been impacted by the pandemic (e.g., you had to close down your physical store), you will also be able to qualify for this program.
To prove that you are experiencing financial hardship, you can gather relevant documentation, such as a letter from your employer that you’ve been laid off or have had your hours reduced at work due to the pandemic. You can also show that you are unable to pay your mortgage because you have been diagnosed with COVID-19 or have had to care for someone who has been infected with the virus. Thus, you might also need to present some medical records to support your claim.
Once you have gathered all the necessary documentation, you will need to submit it to your lender as part of your application for this program.
5. Be a US Citizen or Permanent Resident Alien
Last but not least, you must be a US citizen or have permanent residency in the country in order to be eligible for this 2022 Mortgage Stimulus program.
This means that even if you meet all the other criteria, you will not be able to apply for this program if you do not have a green card or US citizenship. If so, it is recommended that you check with your lender to see if they offer any other relief programs that might be more suitable for your situation.
How to Apply for This Government Mortgage Relief Program
Now that you know who qualifies for the Mortgage Stimulus program, it is time to learn how to apply for it. The application process is actually quite simple and straightforward. Actually, it only takes you to complete two steps to start enjoying the privilege that comes with this initiative.
Step 1: Contact Your Lender
Before anything else, you will need to reach out to your lender and inquire about the program. Remember to have all your documents ready so that you can prove that you meet the eligibility criteria.
During this step, you will also need to ask your lender for a list of the documents that they require in order for you to complete your application. This way, you can be sure that you have everything that you need before moving on to the next step.
Step 2: Ask for a Mortgage Stimulus Application Form
Once you have determined that you are eligible to apply for the program, you can ask your lender for a Mortgage Stimulus application form, which you will need to fill out and submit. Once your application has been approved, you will be required to sign a contract that outlines the terms and conditions of the program. Be sure to read through this document carefully before signing it.
After you have signed the contract, you can start making reduced mortgage payments. The amount that you will need to pay each month will be determined by your lender, so be sure to ask about this before you apply for the program.
It is important to note that while these reduced payments will give you some relief in the short term, they will ultimately result in an increase in the total amount that you owe on your mortgage. Thus, it is important to make sure that you are able to afford the increased payments once the program comes to an end.
Biden’s Mortgage Stimulus FAQs
Q: How much can I save with this mortgage relief program the 2022 administration has to offer?
A: The amount that you will be able to save will depend on a number of factors, such as the type of loan that you have, the interest rate on your mortgage, and the amount that you owe. Be sure to speak to your lender about this so that you can get an estimate of how much you will be able to save.
Q: Do I need to reapply for this program every year?
A: No, you do not need to reapply for the program every year. Once you have been approved for it, you will be able to enjoy the benefits of the duration of the program.
Q: I’m not sure if I can afford the increased payments once the program ends. What should I do?
A: If you are worried about being able to afford the increased payments, it is recommended that you speak to your lender. They may be able to offer you some guidance and advice on how to manage your finances so that you can still make your mortgage payments on time.
Q: I still have more questions about the program. Who can I contact?
A: If you have any other questions about Biden’s Mortgage Stimulus program, you can contact your lender for more information. They will be able to give you all the details that you need so that you can make an informed decision about whether or not this program is right for you.
As always, it is important to do your research before applying for any government initiatives, as there may be some requirements that you are not aware of. However, if you follow the steps outlined in this article, you should have no problem applying for and getting approved for Biden’s Mortgage Stimulus program.
For more tips and information that you can use in paying your mortgage, feel free to check out the other articles on our site!