CDC extends renter eviction moratorium to October 3

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The Centers for Disease Control and Prevention extended a moratorium on evictions until Oct. 3, the agency announced Tuesday.

Pandemic-era prohibitions against evicting tenants broadly ended in many states at the end of July, but government agencies including the Federal Housing Finance Agency (FHFA) and Federal Housing Administration (FHA) had extended the bans for properties under their jurisdiction until September.

This new announcement may keep millions of renters affected by the pandemic in their homes. But it’s limited to areas of the country with high or substantial transmission of Covid-19, the agency said.

“In the context of a pandemic, eviction moratoria – like quarantine, isolation, and social distancing – can be an effective public health measure utilized to prevent the spread of communicable disease. Eviction moratoria facilitate self-isolation and self-quarantine by people who become ill or who are at risk of transmitting COVID-19 by keeping people out of congregate settings and in their own homes,” according to the statement.

President Biden had called on Congress to pass an extension of the national eviction moratorium but efforts along those lines failed. After a Supreme Court ruling earlier this year, the court indicated that it would be up to Congress to extend the moratorium.

The Consumer Financial Protection Bureau released a new online tool last week to help those facing back rent and eviction who are not covered by the extensions.

The Rental Assistance Finder is designed to help renters and landlords easily find and apply for payment assistance for rent, utilities and other expenses, the agency said in a statement.

The CDC oversees the implementation of the national eviction moratorium, while HUD, the VA, USDA and FHFA each have their own foreclosure moratorium with similar terms.

Fair housing advocates say that the end of these protections could lead to a surge in homelessness without proper planning for mitigation.

Eviction protections for renters extended

The Center for Budget and Policy Priorities estimates that 10 million renters are behind on their payments, with up to 26 percent of all tenants facing possible eviction in some states.

Back in June, the administration extended the national eviction moratorium through the end of July to give renters more time to recover from their COVID-related housing hardships, and give local agencies more time to distribute rental relief, according to Biden administration officials.

The administration emphasized that those funds are meant to help implement “eviction diversion tactics,” which would allow delinquent tenants to remain in their homes while helping landlords recover some of their financial losses.

“Diversionary strategies like these can help families stay in their homes while protecting landlords’ rights. And they’re also a huge win for state court systems,” an administration official said in June, because those courts are facing a major backlog in potential eviction cases. So aid that allows tenants to remain in place eases the pressure on the legal system, too.

Foreclosure moratorium for homeowners

Federal agencies that sponsor mortgages, including HUD, the VA, USDA and FHFA are helping homeowners learn about alternatives to foreclosure in the hopes of preventing a wave of forced homeowner removals.

Housing experts have noted, however, that foreclosures are relatively unlikely in the current real estate market, because rapidly rising property prices mean many homeowners have some equity even if they’re behind on their mortgage payments, so they should be able to sell their homes to cover their debts, rather than go through foreclosure.

In addition to the foreclosure moratoria extensions, HUD, the VA and USDA extended the deadline for new mortgage forbearance applications to Sept. 30. Forbearance allows homeowners to temporarily pause their mortgage payments, but does not forgive any of the debt.

Bottom line

The coronavirus pandemic upended household finances for many, and the national eviction and foreclosure moratoria were meant to ensure people did not lose their homes as a result. This latest extension of those protections will allow regulators more time to distribute resources and educate affected residents about their options for the future.

Some states also have their own supplemental policies that will keep tenants and homeowners in place even after the national policies expire.

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Written by
Zach Wichter
Mortgage reporter
Zach Wichter is a mortgage reporter at Bankrate. He previously worked on the Business desk at The New York Times where he won a Loeb Award for breaking news, and covered aviation for The Points Guy.
Edited by
Senior mortgage editor