Content updated November 2024
It’s been a tough few years for households across the US. In the wake of the pandemic, rising inflation and interest rates have stretched budgets to their limits, making it harder than ever to build savings or get ahead. If you’re asking yourself, “How am I going to make my next mortgage or rent payment?” – you’re not alone. Countless Americans are facing the same challenge, and the pressure can feel overwhelming.
But there’s good news: even in tough times, there are resources and strategies to help. So, if you’re facing financial hardship and worried about your housing payment, take a deep breath. Here’s what you can do to find relief and take back control of your finances.
Don’t Panic…You Have Options
It’s natural to feel a surge of anxiety when mortgage or rent payments feel out of reach, but remember – you’re not without options. While concerns about the economy and cost of living are widespread, there are actionable steps you can take to improve your financial circumstances. Whether you’re worried about emergency savings, managing daily expenses, or staying on top of monthly payments, resources exist to help ease your burden. And as always, we recommend consulting with a financial advisor or appropriate government agency to discuss your specific financial situation.
One valuable place to start is by looking into federal programs that may be available to you. For instance, the Federal Housing Finance Agency (FHFA) regularly develops initiatives aimed at helping those in need. In 2022, FHFA announced that the National Mortgage Association (Fannie Mae) and the Federal Home Loan Association (Freddy Mac), often referred to as “the Enterprises,” would contribute $1.1 billion toward affordable housing programs.1 These funds are dedicated to supporting initiatives that make housing more accessible for individuals and families facing financial hardship.
More recently, in November 2024, FHFA unveiled a partnership with the Enterprises specifically aimed at assisting tribal communities with housing. With new updates and programs being introduced frequently, keeping tabs on FHFA’s website, www.fhfa.gov, is a great way to stay informed and find out about potential assistance options that may benefit you.
The US Department of Housing and Urban Development (HUD) is another vital resource for those navigating housing concerns. HUD’s website provides a wealth of information for renters and homeowners alike, covering everything from rent relief resources and homeownership advice to guidance for dealing with natural disasters and emergencies. Staying updated on HUD’s site, www.hud.gov, can help you find relevant programs and contacts that might be the lifeline you need.
So, if you’re facing financial hardship and are unable to make your payment, there are programs and resources in place to help. But in order to access and take advantage of these programs, there are steps that first need to be taken.
For Renters
Get in touch with your landlord
If you’re facing financial stress and struggling to make rent payments, reaching out to your landlord well in advance can be a crucial first step. Most landlords appreciate open communication, especially from tenants with a positive rental history, and may be willing to work with you to find a solution. They may offer temporary payment adjustments or create a payment plan that can ease your financial burden while keeping your housing secure.
When you speak with your landlord, be transparent about your situation and offer a realistic proposal for how you might manage payments moving forward. This proactive approach allows you to work together on a plan and agreement that is mutually beneficial.
Evaluate all other assistance options
If a payment plan isn’t an option, there are additional resources you can explore. For instance, some banks offer short-term loans that could help you cover your housing expenses temporarily. While loans do require repayment, they may offer lower interest rates than credit cards, which can make the more manageable for emergency situations.
There are also several federal and state programs that provide rental assistance. For example, the U.S. Department of Treasury’s Emergency Rental Assistance (ERA) programs have helped millions of Americans stay in their homes.3 They provide funding to eligible households facing rental debt, covering both current and overdue payments. To find resources in your area, you can access the ERA’s directory, which provides a list of local agencies that offer rental aid. Visit the Treasury’s ERA program website for more information on eligibility and application requirements.
For Homeowners
1. Contact your lender
If you’re struggling to make your mortgage payment, your lender should be one of your first points of contact. Many lenders are ready to work with borrowers experiencing hardship, especially in challenging economic times. Proactively reaching out—ideally before any missed payments—can help you explore options, avoid the stress of late fees, and put you in a stronger position to negotiate relief.
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- Short-Term Relief
For short-term or temporary assistance, mortgage forbearance is often a good place to start. Forbearance allows you to pause or reduce your mortgage payments for an agreed-upon period,2 giving you breathing room to manage other expenses or stabilize your finances. However, it’s important to remember that forbearance doesn’t mean forgiveness—any deferred payments will still need to be repaid once the forbearance period ends. - Long-Term Adjustments
If you anticipate a longer-term need for assistance, a loan modification might be a more sustainable solution.2 This option allows you to adjust the terms of your loan, such as reducing the interest rate, extending the loan term, or even changing the loan type. Modifications can help make your monthly payment more manageable over time, especially if your income has permanently shifted or your financial outlook has changed.
- Short-Term Relief
Whichever option you choose, it’s essential to work with a lender you trust and to fully understand any terms or future obligations associated with the relief you receive. Taking these steps can make a significant difference in safeguarding your financial health during a tough time.
2. Reach out to your bank or credit union
Some banks and credit unions offer assistance programs specifically designed to support customers facing financial challenges. These programs may include options such as temporary payment deferments, low-interest loans, or hardship grants that can help ease the pressure of covering essential expenses.
Start by contacting your financial institution to ask about any relief options that may be available to you. Some banks and credit unions offer programs tailored to help members keep up with housing payments, cover emergency expenses, or manage cash flow during times of economic stress. They might also offer financial counseling or connect you with additional resources that could provide added support.
Keep in mind that eligibility criteria and program offerings can vary widely between institutions, so it’s worth reaching out to explore your specific options. Even if your bank or credit union doesn’t have a program that applies to your situation, they may be able to suggest other resources or strategies to help you manage through the financial difficulties you’re facing.
3. Eliminate your monthly mortgage payment with a reverse mortgage—just keep up with property taxes, homeowner’s insurance, and home maintenance.
If monthly mortgage payments are straining your finances – there is another solution available. Available to homeowners age 62 and older, a Home Equity Conversion Mortgage – also known as a reverse mortgage – allows you to tap into your home equity to eliminate monthly mortgage payments4 and free up additional cash flow.
How Does it Work?
A reverse mortgage lets qualified homeowners access a portion of the equity in their home to use as they wish. If there is an existing mortgage on the home, the money from the reverse mortgage is first used to pay off that loan – and since no monthly mortgage payments are required,4 you can eliminate that monthly expense and redirect those funds to other priorities in these challenging economic times.
The current housing marker’s high home values mean that many seniors are in a strong position to benefit from a reverse mortgage, often able to access more funds than they could in previous years. And with more 1.3 million Americans having already chosen a reverse mortgage5 to strengthen their financial plan, now may be an ideal time for you to consider it too.
To explore how a reverse mortgage could help you eliminate monthly payments4 and bolster your financial security, contact the Longbridge team today. We are here to help!
