Illustration: Aïda Amer/Axios
For many people who've lost jobs or income because of the coronavirus pandemic, tomorrow presents a stressful decision: Do you pay your rent or mortgage?
Why it matters: The new CARES Act that was signed by President Trump on Friday protects homeowners and renters who are suffering from the response to the coronavirus pandemic — but it's not “a one-size-fits-all policy rulebook,” a congressional aide tells Axios.
- The bill prohibits foreclosures and evictions on all federally supported mortgage loans (including those owned by Fannie Mae and Freddie Mac) for a 60-day period that began on March 18.
- Landlords are prohibited from evicting tenants and charging late fees and penalties for those in federally backed housing for 120 days.
The big picture: For those laid off, furloughed, or whose incomes have plummeted because of the response to the coronavirus outbreak, we've put together a guide.
- Check with your landlord, bank or mortgage company to see if they’ve adopted leniency policies.
- See if your city or state is among those that have suspended eviction proceedings — your payment obligations don’t go away, but you will have a measure of protection.
Between the lines: Personal finance experts recommend looking at your entire financial picture and cash flow situation before deciding whether to skip a rent or mortgage payment.
- Prioritize your immediate necessities: food, medicine, utilities, health insurance.
- Piled-up rent or mortgage bills aren’t going to go away, so consider tapping emergency savings to cover them.
Under the CARES Act, adults will receive payments of up to $1,200 in as little as three weeks, and most children will get $500.
- The new law makes it easier to tap retirement accounts like IRAs and 401(k)s for up to $100,000 in cash: Early withdrawal penalties for IRAs are temporarily waived, as are tax penalties for borrowing against a 401(k) or similar plan.
- Using your retirement money as a piggy bank isn’t always the best option, since you’re selling when the market is at a low point and you'll miss out on possible future gains. Alternatives include a personal loan, a home equity loan or a home equity line of credit.
Go deeper: Advice from the Consumer Financial Protection Bureau