Ilhan Omar Reintroduces Legislation to Cancel Rent, Mortgage Payments During Pandemic

MINNEAPOLIS, MN - NOVEMBER 03: Representative Ilhan Omar (D-MN) speaks at a campaign rally for Senator (I-VT) and presidential candidate Bernie Sanders at the University of Minnesotas Williams Arena on November, 3, 2019 in Minneapolis, Minnesota. Before introducing him, Rep. Omar praised Sanders for his support of unions, comprehensive immigration …
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Rep. Ilhan Omar (D-MN) reintroduces legislation that would cancel and forgive nationwide rent and mortgage payments throughout the coronavirus pandemic.

As it stands now, many outstanding payments during the coronavirus are in forbearance, which are fully owed payments due in the future. Under Omar’s plan, such forbearance would be totally forgiven, with no negative impact on credit ratings or rental history.

Additionally, the legislation establishes a “Landlord Relief Fund,” overseen by the Department of Housing and Urban Development to reimburse landlords for the loss of rent payments.

According to a press release, Omar also wishes to:

…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.

“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), also a co-sponsor, 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 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.
The announcement of the legislation also did not address 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.

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