Mortgage Relief And Housing Assistance Programs For Seniors
Struggling to pay your mortgage or rent? Discover the best options for relief and housing assistance.
African American senior couple stand happily in front of their houser

Many seniors struggle with house payments they cannot really afford. What’s the real cause of this? Income has often decreased. There are many reasons for less income. It may be due to retirement, death of a spouse, or job loss. With less money coming in, monthly payments have become out of reach.

With mortgage relief programs, senior homeowners have options.

Let’s explore what’s possible.

Help From The Federal Government

In response to the coronavirus pandemic, owners of single-family homes with federally backed mortgages, have new options for financial help.

If you’re having trouble making payments, these may be helpful.

First, Eviction and Foreclosure Moratorium.

In March 18, 2020 an eviction and foreclosure moratorium went into effect. This has been extended through June 30, 2020. During this time, homeowners will not be charged late fees or evicted from their homes.

Additionally, lenders will not initiate foreclosure proceedings. They also will suspend any foreclosure proceedings already in process. Before you contact your mortgage loan servicer, make sure you know your rights.

Second, Mortgage Forbearance.

The key idea here is that federally backed home loans can get six months of mortgage help. FHA reverse mortgages are also eligible. The federal law also protects homeowners with mortgages backed by Government Sponsored Enterprise (GSE) such as FHA, VA, USDA, Fannie Mae, and Freddie Mac.

If you’re having trouble making payments because of COVID-19, your loan servicer must:

  • Defer or reduce your payments for six months
  • Give you another six months of mortgage relief at your request
  • Offer options for how you can make up the deferred or reduced payments.

Not sure if your mortgage qualifies? Check the list of federal agencies that provide or insure mortgages.

If you don’t have a federally or GSE backed mortgage, don’t give up. You may still have relief options, either through your mortgage loan servicer or your state. One of the first things to do is find out who owns or services your mortgage.

You can check this out online, or by calling or writing your servicer.

Additionally, many states have set up or are in the process of setting up mortgage relief programs. Some of these programs also include suspension of foreclosures. Check your state’s government website to get more details.

Reverse Mortgage Programs

If you have a significant equity in your home, a reverse mortgage program could work for you. The rules are precise and you must be at least 62 and have a minimum of 55% equity in the home. The reverse mortgage pays off the existing one, enabling you to live in your home you could otherwise not afford.

Typically, after obtaining a reverse mortgage, you still must pay property taxes, insurance, and home maintenance according to FHA guidelines. Generally, as long as you live in your home and follow the obligations, the loan does not come due.

Of course, you might be wondering about specific costs, fees, payouts and so on. This is when it may be helpful to crunch the numbers. A reverse mortgage calculator helps you do that in the privacy of your own living room.

During the recent coronavirus pandemic, reports found that more seniors turned to reverse mortgages as a cash lifeline. According to Reverse Mortgage Insight, applications for this type of mortgage were up 15% in March, 2020.

But, what if you aren’t a homeowner? If you are looking for affordable housing programs, these three HUD programs may be useful to you.

Low Income Housing Tax Credit

This is a federally funded program, available to the public since 1986. It is not specifically designed for seniors, but the program’s goal is to ensure there is adequate housing to meet the needs of the population.

Building owners choose how many units to set aside for low-income residents. Participating building owners accept the rent amount set by HUD and to be eligible for tax credits. A senior who meets the HUD income criteria can find options locally by searching for HUD-approved dwellings that offer tax credits.

Housing Choice Voucher

This is most commonly known as Section 8, an affordable housing option for low-income residents. While not specifically for seniors, it enables people to find safe and reasonable accommodations. Participating landlords accept 30% of the family’s or individual’s income as full rent.

Check your local area for guidelines and availability.

Section 202

This assistance program is specifically for seniors, aged 62 and older who meet a “very low income” requirement. It’s the only government subsidized affordable housing, with over a quarter million senior living units.

The payment structure is similar to Section 8; with income recertification required each year. If your income exceeds the low-income limit, you will no longer receive a rental subsidy, but you can remain in Section 202 housing as long as you wish.

Because this type of housing is exclusively for seniors, it tends to be quieter and more low-key. Some housing developments also provide assistance for daily chores, social events, and transportation options.

A good starting place is to check online for federal rental assistance, homeownership and home buying assistance programs. There may also be state or local programs that could help you find your next place to live.

Assistance Club Summary

The Big Idea: There are options for seniors to find mortgage relief and housing assistance. Programs exist to help both homeowners and renters find safe and reasonable solutions. Whether federally or state funded, these assistance programs were created to take care of the housing needs of seniors. You may be able to benefit from one of these programs.