Coronavirus Hardship Loans: What They Are How They Work And How To Get One
Everything you need to know about loans for people affected by the COVID-19 epidemic.
Dori Zinn
Contributing Writer
Dori Zinn loves helping people learn and understand money. She’s been covering personal finance for a decade and her writing has appeared in Wirecutter, Credit Karma, Huffington Post and more.
Even though the government has provided some intermittent assistance during the coronavirus pandemic — stimulus checks and expanded unemployment benefits — millions of Americans are having trouble making ends meet. Almost 32 million collected unemployment in July. The eviction protections secured by the CARES Act have now expired. And the $600 enhanced unemployment payments have now ended, too. Whether it’s paying the mortgage, keeping the lights on or simply buying groceries, millions of people are in dire need of cash.
A coronavirus hardship loan can help. It’s a personal loan that can help provide temporary financial relief from the impact of the pandemic. If you’ve lost your job, your income has been reduced or you’ve blown through the government stimulus money, a hardship loan could help you float until things stabilize.
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Programs That Help You To Find A Job
There are several federal government agencies that offer assistance to those who are looking for a job or wishing to learn new skills. Furthermore, the job market today is extremely competitive and employers often require specific skills or training in order to offer a job to a citizen who requests one. The One-Stop Career Center at the local level is an example of a state and federal assistance program.
Work from home people who need financial assistance can also apply. State or federal agencies, private companies, non-profit organizations, and even Internet companies provide you with discounts for the purchase of electricity, Internet, or even a computer or laptop.
Grants Programs To Avoid Eviction
Homeowners are not the only ones eligible for government assistance. Rent assistance programs are also available for those who fall behind on their rent. It is usually reserved for people who owe a monthly payment or more, as long as the outstanding balance does not exceed 60% of the familys gross monthly income.
How can I avoid eviction with help programs? Again, Contact the HUD agency nearest you. A number of programs are offered there, such as Continuum of Care . There is also the possibility of receiving emergency cash Help for paying utility bills, a subsidy for paying the security deposit, and money for moving expenses.
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Help With Urgent Or One Off Expenses
If youre faced with a cost youre unable to pay because youre on a low income, or because you have no money at all for some reason, you may be able to get financial help to cover that cost. For example, you might be able to get an advance payment of a benefit youre claiming, or support from your local council or a charity. The exact amount you receive will depend on your circumstances.
Buying A Home Might Be More Affordable Than You Think
When you buy a house with low income, you might face several obstacles.
Its not easy to save for a down payment while renting. And you might have a harder time keeping your debt-to-income ratio and credit score pristine.
Fortunately, there are private and government-backed programs to help low-income families and individuals break into homeownership.
Chances are, you qualify for at least one of them.
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Fill Out The Application Form
- Sign and date the sections marked My Declaration and Consent for Canada Revenue Agency.
- If applicable, include documentation that demonstrates your high ongoing prescription drug needs, such as a pharmacy dispensing history report.
The declaration section is important. By signing it, you are saying that you understand everything in your application. The consent section is important because you are giving the Alberta government permission to get your income tax information from the Canada Revenue Agency to verify your income. Your information will not be shared anywhere else for any other reason.
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Down Payment Assistance Program
The money you put “down” or the down payment on your home loan can be one of the largest hurdles for many first-time homebuyers. That’s why CalHFA offers several options for down payment and closing cost assistance. This type of assistance is often called a second or subordinate loan. CalHFA’s subordinate loans are “silent seconds”, meaning payments on this loan are deferred so you do not have to make a payment on this assistance until your home is sold, refinanced or paid in full. This helps to keep your monthly mortgage payment affordable.
MyHome Assistance Program CalHFA Government Loans : MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3.5% of the purchase price or appraised value to assist with down payment and/or closing costs, with a cap of $15,000.
CalHFA Conventional Loans: MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3% of the purchase price or appraised value to assist with down payment and/or closing costs, with a cap of $15,000.
Note that the $15,000 cap does not apply to:
- CalHFA VA Program
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What Are Government Loans
Loans that are either directly funded by the federal government, or are underwritten by private lenders with the backing of the U.S. government, can be referred to as a government loan. Borrowers must repay government loans , usually with interest.
A government grant is meant to fund ideas and projects to provide public services and stimulate the economy, and doesnt need to be repaid. But the federal government doesnt just give free money to individuals for personal purposes. Instead, government grants typically go to state or local governments, universities, researchers, members of law enforcement, organizations and institutions with initiatives that will benefit the public and the economy.
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Homeready And Home Possible
HomeReady and Home Possible are two different conventional loan products offered by Fannie Mae and Freddie Mac, respectively.
Remember how on government-backed loans various government agencies guarantee certain loans offered by lenders? Fannie Mae and Freddie Mac play a similar role in the lending of conventional loans.
For low-income borrowers, regular conventional loans can sometimes be harder to qualify for, especially if youre having a hard time saving up for a down payment. HomeReady and Home Possible loans allow buyers to finance up to 97% of their home purchase, meaning borrowers can make down payments as low as 3%.
Though there are some differences between these two programs, they both have similar requirements, including that borrowers meet income limits for their area and take a homeownership education course prior to purchasing.
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Help Paying Your Water Bills
Even though water bill payment assistance programs are not common, one of the countrys largest utility companies such as American Water and other local providers provide them. Households can find help in paying their overdue bills from many companies, whether they are private or public. Currently, water companies offer their customers different government-supported programs that provide grants and other support to help them pay their bills. You can find out more about assistance with paying your water bills by contacting your utility provider.
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Budgeting Loans And Budgeting Advances
If you need help with essential one-off expenses and youre getting certain benefits, you might be able to apply for a Budgeting Loan or Budgeting Advance. These are available for things like furniture, clothes, funeral costs or the cost of moving home.
You can apply for a Budgeting Loan if you or your partner receive any of the following:
- Pension Credit
Free Meal Assistance For Low Income Families
Supplemental Nutrition Assistance cards allow eligible individuals to buy food at designated grocery stores and farmers markets using a debit card, which is similar to a debit card. Food stamps are provided by the SNAP program to 47.6 million people, or 23 million households. On average, participants receive 133 dollars a month.
The Special Supplemental Food Program for Women, Infants, and Children is a food stamp program for nursing mothers and young children in addition to SNAP. In addition to food and coupons, WIC provides education and referrals to help pregnant women and children up to age six. In 2017, there were 7.7 million WIC recipients each month.
Children who are in school can take part in the Child Nutrition Program, which provides free or reduced-cost meals to 30 million children. You can apply here for SNAP
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Direct Vs Guaranteed Government Loans
Government loans are either direct loans or guaranteed loans.
With a direct loan, youre borrowing money directly from a government agency. All loan payments will be made to pay back the government.
With a guaranteed loan, youre borrowing money from a private government-approved lender. The government makes a guarantee to the lender that it will cover a certain amount of losses if you dont repay the loan. This guarantee helps reduce the risk for the lender so that its able to extend credit to borrowers who might not qualify for a loan from a private lender.
Help From Your Local Council
If you need help in an emergency, ask your council if they have a local welfare assistance scheme. These provide help with emergency expenses to people on a low income. To find out what help is available in your area, contact your local council.
Schemes vary from area to area and not all councils run them. Some councils fund local schemes – such as food banks and credit unions – instead. In some areas, you can apply directly to the council for help if you qualify. You wont usually be able to get cash, but you might get vouchers, furniture or white goods, for example.
Your council will also be able to tell you about other local help that may be available, such as community food hubs, vouchers for fuel or places to get second-hand furniture.
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Tanf Program Contact Information
ACF provides states, territories, and tribes with Temporary Assistance for Needy Families block grants to help low-income families with children achieve economic self-sufficiency. The federal government does not provide TANF cash assistance directly to the public. Instead, states, territories, and tribes use their TANF grants to fund monthly cash assistance payments to low-income families with children, as well as a wide range of services that are designed to address one or more of the programs four broad purposes.
Select your state or territory from the list below for local TANF and Tribal TANF help, policies, and other program information. General Benefits links below provide access to centralized benefit portals with information about programs beyond TANF cash assistance.
Information about Tribal TANF programs can be found under the state in which the tribe is located. A list of tribes that administer TANF funds can also be found here: Tribal TANF Programs.
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Tips On Getting Government Home Repair Assistance Grant And Loans
Apply as quickly as possible to the government grants for homes. Keep in mind that these have limited funding and there are plenty of people wanting to obtain either the housing repairs grants or low-interest loans.
Not all government grants for home improvements accept applications all year round. Some federal home improvement grants only open for a few weeks while others may accept applications at any time.
Programs such as those dealing with low income home repair after a calamity have a short-period for accepting applications. As such, check when the government offices handling the program will open applications and be prepared to complete the application forms and requirements as quickly as possible.
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Manufactured And Mobile Homes
Manufactured housing is some of the most affordable around. Homes on approved foundations and taxed as real estate can be financed with many mainstream mortgage programs.
Many programs require slightly higher down payments or more restrictive terms for manufactured homes.
HomeReady, for example, increases the minimum down payment from 3% to 5% if you finance a manufactured home.
Mobile homes that are not classified as real estate can be purchased with personal loans like FHAs Title 2 program. These are not mortgages, because the homes are not considered real estate.
Get Down Payment Assistance
You want to buy a home but cant afford a down payment. Enter state-based down payment assistance. These grants and loans help you cover the upfront costs of purchasing a home.
In Nevada, for example, prospective homeowners who qualify can pay a fee and receive a grant of up to 5% of their home loan value to put toward a down payment and closing costs. Help isnt reserved for low-income borrowers. For government loans, Nevadas grant program is available to those with an annual income below $98,500. See if you qualify.
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Free Money From The Government: Covid Relief And More
The high-priority free money from the government these days is COVID relief. Use NerdWallet’s stimulus check calculator to determine how much COVID relief money you could expect and find a link to track the status of your payment from the U.S. Treasury.
Above and beyond pandemic payouts, there are other day-to-day government programs available to those in need. But unlike COVID assistance, you’ll have to seek out and apply for these financial boosts.
Most of these programs are funded by taxes, so technically you pay something, but it’s as close as youll get to finding free money from the government. Note that the COVID-19 pandemic may affect the availability of some of these programs.
What Are Government Programs For Low Income Families
Government assistance or Government Grants are the Programs run by the government and state governments through Various Non Profitable Organizations or Charitable Organizations to help the low income Households. The purpose of these programs is to support families living in poverty to improve their food, health, and education, while providing financial resources and services.
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Government Grants For People With Low Income & Bad Credit
Government grant money, readily available for people with low income and bad credit, has no requirement for repayment. These grants cover a wide range of projects, from assisting those of low income in funding education goals to achieving their home-ownership dreams, making essential home repairs and providing water or waste water.
Federal Government Housing Policies
The federal government won’t give you a home loan, but it can support you to get a home loan with a smaller deposit through several schemes:
- First Home Loan Deposit Scheme. Under the First Home Loan Deposit Scheme a limited number of eligible first home buyers can buy or build a home with just a 5% deposit. You borrow the remainder through an approved lender and then apply for the scheme. This allows you to get a home with a low deposit while avoiding the added cost of lenders mortgage insurance .
- Family Home Guarantee. This scheme allows eligible single parent borrowers to buy a home with just a 2% deposit and avoid LMI too.
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Us Supplemental Security Income Expedited Benefit Payments
If your claim is for Supplemental Security Income benefits for disability or blindness, Social Security may make presumptive disability or presumptive blindness payments for up to 6 months while you are waiting for the Disability Determination Services to make a final decision. Their decision to grant you PD or PB payments is based on the severity of your condition, the evidence available at the time, and the high likelihood that your claim will be ultimately approved, and is not based on your financial need.
The U.S. Department of Social Security MAY be able to make an emergency advance payment to new applicants, who face a financial emergency and are due SSI benefits that are delayed or not received. They will only pay one such advance payment –
Social Security Compassionate Allowance Conditions List – Compassionate allowances are a way of quickly identifying diseases and other medical conditions that clearly qualify for Social Security and Supplemental Security Income disability benefits. The compassionate allowances list allows the U.S. Department of Social Security to make speedy decisions for the most obviously disabled individuals. If a claimant has a condition on the Compassionate Allowance list the SSA can approve their disability in as little as 10 days, with limited medical information which proves their diagnosis.
Usda Section 502 Guaranteed Loan Program
Also known as the Rural Development loan, this option helps prospective low-income homeowners buy a home without making any down payment at all. The major requirement for this loan, however, is that itâs only available for certain properties that are located in rural parts of the country.
According to the USDA, eligible applicants can use the loan to purchase, build, rehabilitate, improve, or relocate a dwelling in an eligible rural area with 100% financing. Furthermore, the program guarantees 90% of the loan, so lenders are extremely comfortable knowing thereâs less risk to approve such a loan without a down payment.
Applicants looking to get into this program cannot exceed 115% of the median household income in the chosen region. They must also agree to personally live in the home as their primary residence and they must be a U.S. citizen, U.S. noncitizen national, or qualified alien.
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