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Posted over 3 years ago

Don't be Afraid of the "Eviction Moratorium". Here are the facts.

It turns out that the Federal Moratorium on evictions only applies to homes/complexes with federally backed mortgages/loans. (FHA/USDA/Fannie/Freddie, etc)

"Section 4024 of the CARES Act imposes a temporary moratorium on evictions. The temporary eviction moratorium applies to certain dwelling units assisted by Community Development Block Grant (CDBG) loans (including Section 108 guaranteed loans), Neighborhood Stabilization Program (NSP) loans, and CDBG-Disaster Recovery (CDBG-DR) loans, as discussed below."

For many landlords this should not apply if you financed through a bank portfolio product or private financing for your rental. It would also not apply if the property is paid off. Outside of this federal moratorium there may be local eviction/foreclosure moratoriums imposed by your local government at the County/Parish/state level. You need to check with your specific locale to find out the latest.  

Click here for a link too the HUD.gov FAQ's on the Eviction Moratorium

If you do have a federally backed mortgage you can also still evict someone who is in violation of the lease in other ways aside from payment issues. IE. Pets, Damages, Unauthorized Tenants, etc...


Question 3: Can a recipient or landlord still evict for criminal activity or other lease violations?
Answer: Yes. The eviction moratorium in Section 4024(b) of the CARES Act does not prohibit recipients or landlords from evicting tenants for lease violations other than nonpayment of rent or nonpayment of other charges. 

https://files.hudexchange.info/resources/documents/Eviction-Moratorium-Impact-on-ESG-and-CoC-Programs.pdf

Here is the definition of a "covered dwelling" in regard to this moratorium.



The relevant part of the CARES Act is:
SEC. 4024. TEMPORARY MORATORIUM ON EVICTION FILINGS.
(a) DEFINIT IONS.—In this section:
(1) COVERED DWELLING.—The term “covered dwelling” means a dwelling that—
(A) is occupied by a tenant—
(i) pursuant to a residential lease; or
(ii) without a lease or with a lease terminable under State law; and
(B) is on or in a covered property.
(2) COVERED PROPERTY.—The term “covered property” means any property that—
(A) participates in—
(i) a covered housing program (as defined in section 41411(a) of the Violence Against Women
Act of 1994 (34 U.S.C. 12491(a))); or
(ii) the rural housing voucher program under section 542 of the Housing Act of 1949 (42
U.S.C. 1490r); or
(B) has a—
(i) Federally backed mortgage loan; or
(ii) Federally backed multifamily mortgage loan.
(3) DWELLING.—The term “dwelling”—

(A) has the meaning given the term in section 802 of the Fair Housing Act (42 U.S.C. 3602);
and  (B) includes houses and dwellings described in section 803(b) of such Act (42 U.S.C.
3603(b)).
(4) FEDERALLY BACKED MORTGAGE LOAN.—The term “Federally backed mortgage
loan” includes any loan (other than temporary financing such as a construction loan) that—
(A) is secured by a first or subordinate lien on residential real property (including individual units of condominiums and cooperatives) designed principally for the occupancy of from 1 to 4 families, including any such secured loan, the proceeds of which are used to prepay or pay off an existing loan secured by the same property; and (B) is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by any officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by the Secretary of Housing and Urban Development or a housing or related program administered by any other such officer or agency, or is purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.
(5) FEDERALLY BACKED MULTIFAMILY MORTGAGE LOAN.—The term “Federally
backed multifamily mortgage loan” includes any loan (other than temporary financing such as aconstruction loan) that—
(A) is secured by a first or subordinate lien on residential multifamily real property designedprincipally for the occupancy of 5 or more families, including any such secured loan, the proceedsof which are used to prepay or pay off an existing loan secured by the same property; and
(B) is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way,by any officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by the Secretary of Housing and Urban Development or a housing or related program administered by any other such officer or agency, or is purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.


From what I am reading you also need to provide a 30 day notice if you need to evict someone currently covered under this act for a different reason other than nonpayment of rent.

HOW CAN YOU EVICT SOMEONE FOR NONPAYMENT OF RENT IF YOU DO HAVE ONE OF THESE FEDERALLY BACKED LOANS? (just ideas)

1. Payoff the note using a private lender, savings, retirement accounts and refi later

2. Refi into a non federally backed loan with a bank portfolio product

3. Offer cash for keys to assist with moving expenses, new security deposits or other

The bottom line is that you need to be looking at a Plan B & C since the president just extended this moratorium. I have a hunch things are going to get worse and not better through the election so this moratorium may be extended. I personally would plan for this eventuality. 

(excuse any typos)


The Act
https://library.nclc.org/sec-4024-temporary-moratorium-eviction-filings












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