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What Does The Second Stimulus Bill Mean for Landlords

The impact of COVID-19 is yet to really be fully understood. However, estimates suggest millions of people would drop into poverty by January 2021 if new stimulus aid wasn’t passed and that up to 40 million people could end up facing evictions due to missed or late rent payments.

From our own unique data sets, we know that between June and September there was an 8% decrease of rent payments by the due date. However, the federal government has been at loggerheads coming to an agreement on additional financial aid and aid that was promised in October. Additionally, the original $2.3 trillion Cares Act passed in April 2020 was all but spent by the end of July.

However, late on Monday the 21st December, Congress passed an additional $900 billion bill, with both sides of the aisle appearing to be reasonably happy.

In this article, we take a look at some of the key points of the new stimulus bill and what this bill could mean for you as a landlord. 

$600 Stimulus Check

As part of the original stimulus check $1200 was given to every American. This broad sweeping stimulus check did a lot to help many of the worst impacted as unemployment skyrocketed.

The second bill is less than half the first, so it’s unsurpising the amount of the second check is less. Also, there are additional caveats to the bill disqualifying higher earners from receiving this aid – meaning this stimulus check is specifically designed for lower income families, many of whom are renting.

You’re eligible to receive a $600 one-time payment if your 2019 reported income was $75,000 or less. Those eligible for relief who have dependent children will also get $600 per child. For every $100 above the income limits the amount of stimulus you receive drops by $5.

For those worst effected there are serious concerns that $600 is not going to be enough.

Extended Unemployment

As part of the new stimulus action, known as the Pandemic Emergency Unemployment Compensation an additional $300 will be added on top of state benefits until March 14th 2021.

This benefit also extends who can qualify for unemployment benefits to include many who wouldn’t traditionally qualify such as self-employed and part-time workers.

This benefit paired with the prior should alleviate many lower-income households’ immediate financial problems and help many catch up with their rent or continue with their rent payments. However, for those tenants with higher rent rates an additional $300 may not cover it.

These checks were originally set to end Dec. 26 but will continue through March 14. If you have not hit your maximum by March 14, the legislation says pandemic unemployment assistance will continue until April 5, 2021

california rental application

Rent Relief

Additional rent relief funds will be distributed to state and local governments. Tenants may be able to qualify and gain additional rent relief if they meet any of the following criteria:

  • One or more members of the household qualified for unemployment benefits, experienced a reduction in income or experienced other financial hardship due to the pandemic.
  • They can demonstrate a risk of housing instability by presenting a past-due utility bill, past-due rent notice, or eviction notice.
  • They have household income of no more than 80% of the area’s median income per household.

States and cities receiving funds to provide rental assistance have been instructed to prioritize the following applications:

  • Household income does not exceed 50% of the area median income per household
  • One or more members of the household are unemployed and have been unemployed for 90 days prior to applying for assistance

In most cases, funds granted to renters will be paid to their landlord or utility company directly by the state or city managing the money. 

It’s important to note that landlords and property owners can apply for assistance on behalf of their tenants with permission from the tenant. 

Eviction Moratoriums

The eviction moratorium that was set to expire on December 31st has been delayed and is now set to expire on January 31st. It’s essential to communicate to tenants that rent is still due despite eviction moratoriums. 

“This Order does not relieve any individual of any obligation to pay rent, make a housing payment, or comply with any other obligation that the individual may have under a tenancy, lease, or similar contract,” reads the notice published in the Federal Register when the moratorium was established in September. “Nothing in this Order precludes the charging or collecting of fees, penalties, or interest as a result of the failure to pay rent or other housing payment on a timely basis, under the terms of any applicable contract.”

Additionally, when you can, it’s advised to help tenants explore the rental assistance options available to them as part of the new stimulus bill.

In order to be protected from eviction, tenants must prove that they’re likely to become homeless if kicked out of their dwelling. To do this they have to fill in and sign a declaration which asks you to declare the following:

  • Their income is under $99,000 or twice that if they file joint taxes, or prove that they received a stimulus check.
  • They have used “best efforts” to get all available government assistance for rent or housing.
  • They are unable to pay their rent in full due to having lost income, were laid off, or you had out-of-pocket medical expenses.
  • Where possible they need to prove they have paid ass much as possible with partial payments.
  • That if they are evicted, they’d likely be homeless, need to move into a homeless shelter, or share a new residence in close quarters with multiple people.

Mortgage Moratoriums

the good news for landlords is that mortgage moratoriums have also been extended for FHA borrowers. The deadline to request an initial COVID-19 forbearance is being extended to Feb. 28, 2021; for homeowners with single-family mortgages insured by the Federal Housing Administration. The moratorium on foreclosures and evictions is extended through Feb. 28 for single-family FHA-insured loans.

Other Things in the Bill

As you can imagine with that much money in the talks and nearly 5,600 pages of documentation there are many more things that this bill covers. These include funding for vaccines and nursing homes, and a few things unrelated to the pandemic such as support for several climate measures, funding for broadband infrastructure, and nearly $1.4 billion for the Mexico US border wall.

What’s Changed for Landlords?

The most important thing for landlords to know about is the additional financial support for lower-income families, especially those directly effected by the pandemic with the additional rental assistance funding. This will undoubtedly play an integral role in preventing evictions in the next 3 months.

As such, it’s well worth exploring local and state rent relief options and informing your tenants should they need it. This could allow an avenue to pursue current overdue rent as well as ensure on-time rent payments in future.

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Ben Luxon

"Ben is an author and real estate enthusiast. His interest in all things entrepreneurial has led him to work with real estate professionals all over the world, distilling their knowledge into articles and Ebooks. His love of travelling has taken him to over 10 countries in the last year, where he has sampled the craft beer of them all."


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