Rep. Ilhan Omar (D-Minn.) on Thursday reintroduced a bill that would guarantee full payment forgiveness on nationwide rent and home mortgage payments throughout the coronavirus pandemic.
Currently many outstanding payments during the coronavirus are in forbearance, which are fully owed payments due in the future, according to a Breitbart report. Under Omar’s plan, titled the Rent and Mortgage Cancellation Act, such forbearance would be totally forgiven. There would be no accumulation of debt for renters or homeowners, as well as no negative impact on a person’s credit rating or rental history.
Additionally, the bill would establish a relief fund for landlords and mortgage holders overseen by the Department of Housing and Urban Development to cover losses from these canceled payments.
Omar’s plan would also “create an optional buyout fund to fully finance the purchase of private rental properties by non-profits, public-housing authorities, cooperatives, community land trusts and states or local governments – in order to increase the availability of affordable housing during this downturn’, according to a press release.
“While the American Rescue Plan extends the national rent moratorium—this is not a longterm solution. People across this country will be forced to pay tens of thousands of dollars in back rent when it ends,” Omar said.
“No one should be forced to choose between putting food on the table and keeping a roof over their heads,” said Rep. Mondaire Jones (D-NY), a co-sponsor of the bill.
Rep. Ayanna Pressley (D-MA), a co-sponsor of the bill, remarked, “With the economic impact of this pandemic worsening and the threat of eviction and homelessness looming large for families nationwide, we must take every measure possible to keep families safely housed, forgive all rental debt, and ensure that the credit scores of hard hit families are not forever tarnished.”
The bill was originally introduced back in April 2020, at the start of the nationwide stay-at-home orders that were put into place. However, the bill, which was introduced when Republicans still controlled the Senate, never received a vote.
Breitbart concluded in their report, “the total price of forgiving the loans and rental payments is not known but would likely be enormous. It’s also unknown how the legislation would determine the beginning or the end of the pandemic, which could stretch for months on end.” It is also unclear as to how the mortgage-backed securities market may be impacted by a federal program that affects debt obligations. Additionally, no market studies were pared with the ramifications of subsidized housing with the legislation’s announcement.”