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Help for Homeowners Affected by Coronavirus Crisis

cares act

As the coronavirus crisis has intensified, I’ve had many friends and clients come to me with questions and concerns about how they can apply for assistance, leverage their home's value and talk to tenants who may be struggling right now.

Don't Panic; Help is Available

My first message to these friends and clients is to not panic. While the uncertainty in our personal and professional lives, as well as in our communities, is unsettling, homeowners do have options.

The Coronavirus Aid, Relief and Economic Security (CARES) Act provides recovery checks for individuals and families. Individuals with an adjusted gross income of $75,000 or less will be entitled to $1,200. Couples filing jointly with an adjusted gross income of less than $150,000 will be entitled to $2,400. There is an additional $500 for each child under the age of 17. If you’ve lost your job as a result of the coronavirus pandemic, the CARES Act provides for Pandemic Unemployment Assistance for a maximum of 39 weeks. For more information and to apply for assistance, visit https://huiclaims.hawaii.gov.

In addition, your local state government may have other solutions. Check with local reporting and your personal banks to see what is available. Research pays off!

Tapping Your Home’s Value

If you or someone in your family has lost your job and you need to raise funds quickly, you may want to consider tapping into your home’s value. Ƒirst, take a look at your monthly budget to see how much additional funds you will need—this will help you to determine if you need to raise additional money or if you can simply trim your expenses.

If you need to come up with a large sum of money, you have two options: If you have equity in your home, you can borrow against the value of your home or you could sell your home.

Home equity is simply the value of your home minus your mortgage balance; in other words, the portion of your home that you own outright. A Home Equity Line of Credit (HELOC) from a lending institution allows you to borrow against the value of your home. It's best to consult a professional who can explain how a HELOC works.

Before you decide to sell your home or investment property, talk to a Realtor® you trust first--they may have other strategies in mind to assist you. 

Talking to Tenants

If you own investment properties and have current tenants, you’ll want to check in with them to see if they are unable to make their rental payments. If so, you can work with them to create a plan of action. Since everyone will be affected in different ways, it's important to communicate with your tenants. In the end, if they are unable to pay rent, you will be stuck with the burden.

Of course, there are tactful ways to bring this up that are fair to both parties. If your tenants are facing financial hardship and are unable to pay rent, you can work out a payment plan with them. For example, perhaps they can pay half now, and half at the end of the month. Keep track of their balances and be sure to put everything in writing.

Ask your Realtor® for a Real Estate Review

Remember, now is the time for us all to come together. We’re in the midst of an unprecedented event, but there are practical steps we can take to mitigate the effects of the coronavirus on our finances. If you’re not sure how the current situation could affect your real estate holdings, ask your Realtor® for a complimentary real estate review. A real estate professional can keep you apprised of your home’s value and offer guidance during these uncertain times.