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What happens if you can't pay rent on April 1 because coronavirus forced you out of work?

Paul Davidson, USA TODAY

For millions of tenants who have lost their jobs because of the coronavirus pandemic, Wednesday, April 1, is D-Day: The monthly rent check is due.

That could pose a nationwide dilemma because 3.3 million Americans filed initial claims for unemployment insurance the week ending March 21 and a similar number may have sought benefits last week. That means virus-related layoffs or reduced hours may have topped 6 million just in the past two weeks.  

Fortunately, the vast majority of tenants – who make up about 36% of all households -- will be getting a reprieve through federal, state or local moratoriums on evictions. Many landlords will similarly get a break on mortgage payments, though others could still be on the hook even if their tenants are delinquent.

Here’s a rundown:

Will I be evicted if I don’t pay rent?

Probably not. The $2.2 trillion stimulus includes a moratorium on all evictions from buildings financed with a federally-backed mortgage, such as those funded by Fannie Mae, Freddie Mac and the Department of Housing and Urban Development. After excluding private mortgages and buildings whose mortgages are paid off, the moratorium covers about 40% of all single-family homes and half of multifamily buildings, says Shamus Roller, executive director of the National Housing Law Project.

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What if I’m not in one of those federally-financed buildings?

At least 34 states and dozens of cities have issued broader moratoriums on evictions that apply to all rental units, with many lasting 30 to 90 days, according to NHLP. So most tenants will be covered, Roller says. In some states, evictions simply can’t be executed because court isn’t in session. In Virginia, for example, eviction cases are suspended until late April, but landlords could still file lawsuits to start the process. If the crisis persists into May, the suspension could well be continued, says Joe Cooleen, a landlord-tenant lawyer at Baskin, Jackson and Lasso in Falls Church, Virginia.

But 12 states have taken no steps to halt evictions, leaving some renters vulnerable. Roller is calling for a national eviction moratorium “so everyone knows what will happen.”

Do I have to prove I lost income because of the coronavirus?

The stimulus legislation doesn’t require that but some states do, Roller says. Arizona, for example, requires renters to show a “substantial loss of income” due to the outbreak.

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Does a moratorium mean I never have to pay rent for that month?

No, it just means the rent is deferred. That can leave tenants with several months of back payments due when the emergency is over. Some tenant advocacy groups are calling for the cancellation of rent payments during the crisis. When the crisis ends, Roller says, landlords and tenants come to agreements that could include full or reduced payments and some further aid from the government.

So how am I going to pay my rent if I don’t have a job or my hours have been cut?

The stimulus provides enhanced unemployment insurance benefits to furloughed or laid-off workers that includes a $600 weekly supplement on top of the average $300 to $400 check from the state for up to 39 weeks. Most Americans will also receive tax rebates of up to $1,200 in coming weeks. The hope is that these benefits help most affected workers pay their monthly bills.

If I don’t pay April rent, is it going to affect my credit rating?

Your credit rating would be affected if a court eventually issues an eviction notice against you, Roller says. In some cities, eviction cases may be processed but police departments aren’t enforcing them during the emergency, he says. So your credit could be affected even if you aren’t evicted.

Are landlords also granted relief from mortgage payments?

The stimulus provides forbearance on mortgage payments for up to a year but just for federally-backed loans. Some states and banks are also issuing relief for other types of mortgages. Once forbearance ends, borrowers would have to work out a repayment plan or loan modification with the mortgage servicer, NHLP says.

Still, several states are granting moratoriums to renters but not owners, potentially forcing owners to pay their mortgage, utilities, taxes and other costs even though they have less rental income.

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Contributing: Alan Gomez

This article originally appeared on USA TODAY: Coronavirus: What happens if you can't pay rent due to pandemic