‘The need remains critical’: Rent and mortgage relief arrives as state, county announce $320 million in grants
Efforts to aid Illinois residents struggling to pay their rent or mortgage have been dwarfed by the tidal wave of need, but more help is on the way — and just as the state’s eviction moratorium is set to expire.
The state will give $300 million in rent and mortgage grants this fall to people impacted by the COVID-19 pandemic, offering one-time grants of $5,000 for tenants and $15,000 for homeowners. The programs, administered by the Illinois Housing Development Authority, are funded through federal money from the Coronavirus Aid, Relief and Economic Security (CARES) Act passed earlier this year.
Applications for renters open Monday and are available until Aug. 21. Homeowners can apply for grants Aug. 24-Sept. 4.
The need for rent relief and mortgage assistance — which advocates have been calling for since early on in the pandemic — has been clear for months, as layoffs and furloughs sent unemployment numbers sharply up.
In June, Illinois ranked third in the nation for rent deferrals, behind Ohio and Maryland, according to an analysis of U.S. Census Bureau survey data by online lending marketplace Lending Tree.
Statewide, 24% of Illinois renters deferred or did not pay rent for July, according to the bureau’s July 16-21 survey, part of its weekly look at the impact of COVID-19 on the nation. Nationally, 21.3% deferred or did not pay July rent.
Illinois homeowners have reported less severe a toll, with 19% deferring or not making their mortgage payment in July, according to the data. Nationally, it was 12.7% of homeowners.
The state’s eviction moratorium is set to expire Aug. 22, meaning landlords can move forward with evicting tenants for nonpayment.
The new state housing grants are projected to benefit 30,000 renters and up to 15,000 homeowners, said Andrew Field, an IHDA spokesman. His agency is targeting early September for the first payments to roll out.
“It’s all a cycle — if the renters can’t pay, then the landlords aren’t getting paid. And if the landlords can’t pay, then the servicers are going to file for foreclosure,” he said. “Everyone is in this together. We’ve done broad outreach to both rental assistance organizations to landlord associations throughout Illinois to let them know that we’re all in this together.”
To be eligible to apply for back rent to be paid, a landlord has to provide documentation in support of a renter’s claim, and the renter must have an unpaid balance that began on or after March 1 due to loss of income related to the pandemic.
“People who are eligible will submit applications and, at the same time, their landlord has to submit additional documentation. So it’s kind of a two-step process where the landlord needs to be involved, too,” Field said.
Those seeking mortgage assistance must have a past-due balance or forbearance balance that began on or after March 1 due to loss of income related to COVID-19. The home must be a primary residence, and the mortgage balance has to be $425,000 or less and in a first lien/mortgage position. Reverse mortgages do not qualify. Both programs also have household income limitations.
Grantees will be selected blindly from a pool of approved applications, randomizing the process if there are more applicants than funds available.
All grants, when awarded, will be sent directly to the mortgage servicer or landlord within approximately seven to 20 days, depending on the grant program. Payments will be made through December, or until funds run out. People who have received coronavirus-related housing assistance from another government program are ineligible.
To provide outreach and application assistance, the state has tapped 62 community organizations, including the Chicago-based Lawyers’ Committee for Better Housing.
“It’s great that all this money is there, but it all has to get where it needs to get to save people before the moratorium ends,” said Mark Swartz , LCBH executive director. “It’s a race. Are we going to be able to get the funding out to people, so we can redress the issue before people start to avail themselves of eviction court again? That’s the big issue.”
LCBH has been on the front lines of rental assistance, advocating for rent relief and providing free legal assistance to tenants in need of it. LCBH helped create Rentervention, a free tool that helps Chicago tenants with rental problems like eviction and points them to resources.
The Lawyers Trust Fund, another key partner in creating Rentervention, is also building a tool with up-to-date legal knowledge on coronavirus-related financial issues. The free and automated navigator will be called COVID Housing and Economic Loss Prevention (HELP), said Hanna Kaufman, counsel for innovation & technology with the Lawyers Trust Fund.
“People could use COVID HELP to get guidance, resources or targeted referrals to legal aid resources, and it would be available 24 hours a day through a computer or smartphone,” she said. The tool would detail issues related to foreclosure, consumer debt, probate issues, bankruptcy and unemployment.
Kaufman said the employment component will go live in early September, while the entire COVID HELP system is on a trajectory to go live later this year.
“A lot of people are getting together and trying to figure out how can we help the system,” Swartz said. “That’s why there’s such a push to make sure people get access to all this assistance.”
While Chicago opened a second round of housing grant applications that ends Monday, suburban Cook County residents can now apply for help, as well, Cook County Board President Toni Preckwinkle announced Friday.
Suburban Cook County renters experiencing financial insecurity due to the pandemic can apply for rental assistance up to $4,500. The program can pay for up to three months of overdue or future rent for income-eligible households.
Those renter households must earn under 80% of the area median income, which is around $72,000, said Richard Monocchio, executive director of the Housing Authority of Cook County. One-quarter of the funding will go to communities most impacted by COVID-19, he said.
He said he expects demand to exceed the $20 million in CARES Act funding.
“We know that we’re going to have more folks apply very likely than we can fund at the moment, so it’s going to be a lottery system,” Monocchio said Friday. “Twenty-five percent, at least, will go to the hardest-hit communities, and then we will randomize the list if necessary and rank people on that list, in that fashion.”
Residents can review their eligibility and apply online for rental assistance online beginning Monday. The application period ends Aug. 18.
Preckwinkle noted the “staggering” increase in layoffs and high delinquency on mortgage payments as evidence of the need for rental assistance in Cook County. She said the county will launch a series of new initiatives in coming weeks to distribute $82 million total in CARES Act funding.
“Scared renters are facing eviction when the (county) chief judge’s moratorium expires in just a few weeks,” Preckwinkle said. “It’s evident that the need remains critical and urgent.”
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