Homeowners associations are great resources for homeowners during this COVID-19 pandemic. While many people are falling behind on payments, it is important for HOA’s to be doing their part to give accurate information to owners who are going through financial hardship. This helps not only the homeowner but the HOA as well since they can help prevent late payments and foreclosures. While HOA’s cannot give legal advice, they need to be informed regarding updates going on across the country.
The good news is that even if homeowners have not lost their jobs, most mortgage companies are allowing them to defer or lessen mortgage payments for a minimum of three months. If homeowners opt to defer their mortgage payments, this typically means that the extra payments will be tacked on to the back of the loan. For example, if the owners are not required to pay the next three months, those three months will be added on to the life of the loan.
Another important detail worth noting is that all foreclosures are waived for 60 days, per the Department of Housing and Urban Development (HUD). This decision was reached on March 18th, 2020. https://www.hud.gov/press/press_releases_media_advisories/HUD_No_20_042
Car Loan Relief
Most car loan companies are offering between one to three months in deferred payments. The same concept goes as above, the extra months will be added on to the back of the loan. Interest can accrue during this time and possibly extra fees. Usually not, however, but it is something your homeowners should ask about.
Unemployment for Self-Employed/Independent Contractors
No, you did not read this wrong. This is still a topic that is up for discussion with each state. The consensus is that each state will now allow people to file for unemployment- even if they are self-employed or considered independent contractors. People can apply on their state website for this.
Again, for those that are self-employed, they can now apply for a Small Business Administration loan to help while they are down and out. $376 billion is available for workers and small business owners. As long as someone has a legitimate company that is filed with their state, county or city they are encouraged to apply. If they don’t have a tax EIN, they would use their social security number. https://covid19relief.sbaa.gov/#/
More options are available at SBA.Gov website: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options
Lastly, do not forget about the option to help with late fees. This is something the board will have to discuss in depth since it can pose a difficult conversation and decision. Deferring fees may cause more harm, for example, if a homeowner has a $175 assessment fee per month and they are able to make these payments but choose to defer instead, they will now owe a large lump sum when payments are due again, which can cause more financial hardship.
A couple of options would be to hold off on late fees or extend the due by period and waive foreclosures for an extended period (even after HUD’s decision for 60 days). Another item to note would be to only make needed repairs since assessments usually are the only source of extra money the HOA makes and this could help cut costs. This will take much burden off HOA’s during this time since they may be working on a smaller budget.