Chicago officials announced a new pledge Wednesday aimed at aiding city residents with rent and mortgage payments as they stay inside, many unable to work, during the coronavirus pandemic.
Chicago landlords who take the pledge will give eligible renters "who demonstrate significant financial impact resulting from COVID-19" the potential for grace periods on rent payments, a written repayment plan or no late fees on missed payments.
For homeowners, housing lenders pledge to give eligible mortgage holders a grace period on payment, neutral reporting to credit agencies or no late fees on missed payments. They will also suspend any foreclosures filings until May 31.
“Our bold, data-driven response to the COVID-19 virus has already yielded important gains to our public health, but it has also come with additional costs that are being borne out by those least able to afford them,” Chicago Mayor Lori Lightfoot said. “The Chicago Housing Solidarity Pledge represents our city’s shared commitment to our residents and building owners alike whose homes and livelihoods have come under threat as a result of this crisis, and I am extremely proud that renters, landlords, homeowners, and lenders have all come to the table to work in partnership for our city and develop strong solutions to our shared challenges.”
Among the groups joining in the pledge were:
• Bank of America
• BMO Harris Bank
• Byline Bank
• Fifth Third Bank
• First Eagle Bank
• First Midwest Bank
• Northern Trust Bank
• US Bank
• Wintrust Bank
• Second Federal Credit Union
• Seaway Credit Union
• Lawyers Committee for Better Housing (LCBH)
• Chicagoland Apartment Association (CAA)
• Neighborhood Building Owners Alliance (NBOA)
• Chicago Association of REALTORS (CAR)
"The Chicago Housing Solidarity Pledge is about compassion and flexibility," Department of Housing Commissioner Marisa Novara said. "It's about everyone doing their part. We are asking landlords to work out flexible payment plans with tenants, and to do so, they need flexibility from their lenders. Tenants who have lost work, communicate with your building owner and try to work out a plan and tenants who have not lost work, support those who have by paying your rent. Working together, we can keep Chicagoans stably housed during and after this crisis."
Lightfoot said she hopes landlords will take advantage of the banks' offer of support but said it is not a mandate.
The state of Illinois has halted evictions and foreclosures amid the pandemic, and has also worked with utility companies to suspend service shut-offs for those individuals who are late on their payments.
State officials are also working with banks and credit card companies, asking them to waive overdraft charges and late payment fees, among other penalties that some borrowers could face as a result of unemployment during the pandemic.
At the federal level, President Donald Trump announced that the Department of Housing and Urban Development has suspended all foreclosures and evictions through at least the end of April because of the pandemic. Many major banks and lenders have instituted programs to allow delays and deferrals on payments.
More than 2.9 million homeowners have taken advantage of a program designed to provide relief to holders of government-backed mortgages, part of the coronavirus CARES Act relief package.
This represents 5.5% of all active mortgages, according to Black Knight, a mortgage data and analytics company that is now tracking the growing numbers daily.
The program allows borrowers to delay their monthly payments for a year. Those payments are then tacked on to the end of the loan, or paid back over time in a mortgage modification. Borrowers must tell their mortgage servicers that they have had financial hardship due to the coronavirus pandemic, but they do not have to provide any proof.
While state and federal officials have enacted a series of executive orders to help people laid off during the pandemic, a tenant’s rights group called “Lift the Ban Coalition” has encouraged the state to order a rent holiday, and to extend it even after the “stay-at-home” order is lifted.
A modified stay-at-home order takes effect across the state May 1.