Rep. Ilhan Omar, D-Minnesota, introduced a bill in the U.S. House calling for a nationwide cancellation of rent and mortgage payments until the coronavirus pandemic has ended.
The bill, called The Rent and Mortgage Cancellation Act, calls for the cancellation of all rent and mortgage payments on all primary residences for as long as the COVID-19 pandemic continues or up to one year.
It follows a bill introduced by Reps. Ro Khanna, D-California and Tim Ryan, D-Ohio, who introduced the Emergency Money for the People Act that would give every American 16 and older $2,000 a month for up to a year.
Landlords and mortgage holders would receive the rent and mortgage payments from a fund set up by the federal government.
In addition to rent and mortgage payment cancellations and payment to landlords and mortgage holders, the bill includes:
- No accumulation of debt for renters or homeowners.
- Payments would be suspended for a person’s primary residence only.
- No negative impact on their credit rating or rental history.
According to the bill, the cancellation of rent or mortgage payments would be retroactive to March 13, 2020, meaning those who paid their rent or mortgage in April would be reimbursed.
A fund administered by the Department of Housing and Urban Development would pay landlords and mortgage lenders for the rent and mortgage payments. Landlords and lenders would have to agree to a number of fair and inclusive lending terms for a period of five years, including:
- Yearly reporting of detailed lending data delineated by race, ethnicity, zip code, age, credit score, interest rates and other loan pricing features.
- Lenders submitting yearly detailed data on their office locations, outreach practices and their referral systems.
- If the conditions are violated, the federal government can seek to recoup the funding.