The second round of stimulus is underway and one policy that would have a big impact on most Americans, including tenants, landlords, and real estate investors is The Rent and Mortgage Cancellation Act of 2020.
The bill, sponsored by Representative Ilhan Omar, D-M.N., would eliminate rental and mortgage payments on any primary residence for the duration of the national emergency, allowing landlords and lenders to recoup losses by applying to a relief fund.
The fund would repay any tenant or mortgager for the month of April, and the elimination of payments moving forward would extend through the end of the national emergency.
There are a number of stipulations.
Lenders and landlords would not be able to collect past rent or mortgage, late fees, or report late or missed payments to credit bureaus.
There are also a number of terms that landlords would need to adhere to for the next five years, including a moratorium on rental rates, no discrimination against a tenant’s income source, no discrimination against things like credit score and immigration status.
This bill, however, would place landlords and real estate investors in a very difficult position. It forces landlords to waive their right to annually adjusting rental rates. The bill would also essentially force all landlords to participate in Section 8 Housing programs.
The bill is aggressive and comes with a hefty price tag that will be difficult to get through Congress, however portions of the bill may gain traction in some form.
“This act also removes the free market, regulating who can purchase real estate and what they do with the real estate once purchased and caps the income potential for any participating property or asset in this plan.”