While Future Stimulus Is Uncertain, Relief Is Available for Colorado Landlords
As property managers and owners, we keep a keen eye on the state of our local economy and strive to provide the most up to date resources for both our clients and our residents. The Coronavirus crisis has impacted every aspect of our lives. We know this is a stressful time not only for residents on the brink of eviction, but also for property owners who depend on the rental income in order to pay their mortgages.
Currently one in ten Coloradoans are out of work. The federal eviction moratorium covering Fannie Mae and Freddie Mac backed mortgages expired mid-July and the $600 per week unemployment benefits supplement has been reduced to $400. Our government is in gridlock on what to do next, and there is a wave of evictions that are beginning to start.
There is good news though, if you have tenants who did not pay rent between March first and the end of July and still have an outstanding balance, you may be eligible for rental assistance from the state and HUD. Landlords can now apply for the Property Owner Preservation (POP) program on behalf of their residents which provides over $19 million in assistance as part of Federal CARES Act funding. This is good for both landlords and residents, because you may be paid the large amount owed to you and your resident may not have to face eviction.
This program allows the state to pay unpaid rent on behalf of tenants impacted by COVID-19 for the period of March 1 – July 31. There are several landlord requirements such as agreeing to postpone evictions and agreeing to a 30-day minimum notice period following any non-payment after the POP program ends. The program also caps the dollar amount of rent that can be paid based on affordability levels for families making 100% of the area median income. This does not reduce your ability to earn the rent going forward in the contract rate, but if you do have a Class A rental that is above the cap in rent numbers, you may not be fully reimbursed. The large majority of defaults will fall under this cap.
From our most recent collection rates, taken from a sample of more than 3,200 properties, our property management team has only seen a 2% decrease in collections since April. While we would like to credit our amazing team members, we know this is likely partially inflated by the increased unemployment benefits and stimulus from the federal government.
We are keeping in close communication with our residents, creating payment plans when possible and advise those who are self-managing to do the same in order to avoid the cost of vacancy. The POP Program is a light in the tunnel to help you and your residents through this difficult time. Eviction is often a losing-scenario for both parties and we try to avoid it when necessary. The local executive order has also been extended requiring landlords to give a 30-day notice prior to starting the eviction process.
To learn more about the POP Program, please visit https://cdola.colorado.gov/rental-assistance. If you would like to discuss how property management can save you stress, time and money email me at cory@ realatlas.com.