Coronavirus Stimulus Checks: Can I use them to help buy a home?

The Coronavirus Stimulus checks were checks made available to homeowners that were experiencing financial hardship. 

Table of Contents:

What is the homeowner’s stimulus check?

What is the stimulus for homeowners?

Are homeowners getting a stimulus check?

Is the homeowner’s stimulus real?

What should I buy with my stimulus check?

What is the mortgage stimulus?

What is the homeowner’s stimulus check?

With the outbreak of Covid-19, many governments were forced to put in place plans for the economic support of their citizen. In the USA, the American Rescue Plan stimulus relief bill allocated $10 billion to the Homeowners Assistance Fund. This money was then meant to be given to homeowners as a stimulus check so as to assist them with late payments, mortgage payments, and utility costs. The way that this fund would be distributed was left to each state to deal with on their own. All homeowners who had experienced financial hardship after January 21st of 2020 and were receiving an income that was equal to or less than 150% of the median income in their area would be eligible to receive a stimulus check through the government. For those who needed help paying their bills due to Covid-19, this check could provide much-needed relief, and it could help them ensure that they would not be losing their homes because of Covid-19.

While the requirements to be eligible for the stimulus check are not many, part of them included proving the nature and reasoning for the financial hardship that they were experiencing. The reasons could include, among other things:

• Healthcare bills and costs
• A reduction in income
• Job Loss

For those looking to apply for the stimulus check as of 2021, a mortgage balance requirement has also been implemented, which means that to qualify, homeowners need to have a mortgage balance of less than $548,250.

What is the stimulus for homeowners?

At the start of the Covid-19 pandemic, the government passed the American Rescue Plan stimulus relief bill which would give $10 billion to the Homeowners Assistance Fund. Through the HAF, that amount would be distributed to each state to assist them with providing stimulus checks to homeowners that were struggling due to job or income loss caused by the pandemic.

The money was mainly meant to be given to homeowners to help them cover late mortgage payments, utility costs, or other costs that would allow them to keep their mortgage from defaulting. This money was then meant to be given to homeowners as a stimulus check so as to assist them with late payments, mortgage payments, and utility costs. Each state would be responsible for the distribution of the fund according to different tools and criteria. Those eligible for the fund needed to: 

• Have an income that was equal to or less than 150% of the median income in their area 
• Prove that they were experiencing financial hardship because of healthcare bills and costs, a reduction in income, job loss after January 21st of 2020
• As of 2021, homeowners needed to have a mortgage balance of less than $548,250 to qualify for the bill.

Everyone eligible for the fund received a stimulus check that they could use to cover their costs. This program was a program directly set up by the government in an effort to assist those who were struggling because of the outbreak of the pandemic. While currently there are no other suck mortgage relief programs in place by the government, there are certain things that you as a homeowner can do to reduce your costs and get some mortgage relief in 2022.

The Mortgage relief program of 2022 is not a governmental program that one can participate in, but rather, it includes a set of actions that could help homeowners reduce their mortgage payments. This program is for those who are having trouble sustaining themselves while keeping up with their mortgage payments. It further targets those whose mortgage rates are above-market, and thus the payments for their mortgage are artificially high.

The options for homeowner relief programs in 2022 include: 

• Refinancing your home to get a lower interest rate and bring your entire mortgage payment down
• Take advantage of a Streamline Refinance
• Check if requesting a loan forbearance is an option so that you can put a pause on your mortgage payments.
• Discuss with your lender possible mortgage modifications. 

While all of these options are available to homeowners’ direct discussions with lenders may make it harder for them to adjust their mortgage either through refinancing or through negotiations with their lender. The government currently has not set forth any further stimulus checks for homeowners that would be similar to the ones that were given during the start of the Covid-19 pandemic. 

Are homeowners getting a stimulus check?

Homeowners who experienced job loss, a reduction in income, or any other financial hardship after January 21st of 2020, are eligible to receive a stimulus check to cover some of their costs. This stimulus was agreed upon after the American Rescue Plan Act was put in place. Each state was allocated a certain amount that they could distribute to those citizens of theirs that were in direct need of assistance. To qualify for the homeowner’s stimulus check, you would need to fit the following criteria:

• A household income that is equal to or less than 150% of the median income in their area 
• Be able to prove that after January 21st of 2020 you were experiencing financial hardship either due to healthcare costs, income reductions, or job loss.
• Have a mortgage balance of less than $548,250 – this was put in place in 2021

Each state was also able to set its own set of limitations for the stimulus check since state officials were the ones responsible for the distribution of the funds. The government has not yet announced any relief program for homeowners for 2022, so it is unclear if further stimulus checks will be distributed now that states are opening back up. 

Is the homeowner’s stimulus real?

The homeowner’s stimulus program was a real program created by the government as a means of assisting homeowners going through financial hardship because of Covid-19. These programs were part of the American Rescue Plan Act. As part of the American rescue Plan, $10 billion was given to the Homeowners Assistance Fund. From the HAF, that money was distributed to each state, after which point the allocation of the funds to homeowners became the state’s responsibility. Each state could impose its own set of rules and limitations according to which they would be distributing these funds. Most commonly, to be eligible for the stimulus check, you needed to be able to prove that you had been experiencing financial hardship after January 21st of 2020. With the check, homeowners would be able to cover part of their costs and mortgage payments so that their mortgages would not default. The three most common requirements to be eligible for a stimulus where the following:

• A household income that is either equal to or less than 150% of the median income in their area or state
• The ability to provide proof about the financial hardships that they endured could include healthcare costs, income reductions, or a job loss that came to be after January 21st of 2020
• As of 2021, it was a requirement that the mortgage balance of applicants was less than $548,250 

What should I buy with my stimulus check?

If you are the recipient of one of the government’s stimulus checks, you may be wondering what you should do with the money. The stimulus check is there to assist you with all of your expenses and bills, and as such, it would be important for you to use that amount towards some of your running expenses rather than for luxuries. Some of the ways in which you could use your stimulus check include:

1. Paying your bills

Whether it is your credit card bills or your utility bills, you can use the stimulus check to ensure that all of your needs are met and that you are not getting behind on any of the payments that you have due each month.

2. Put the money in an emergency fund

With the current state of affairs, it has become all the more obvious that it is a good idea to be able to have an emergency fund that will be there to help you with any unexpected expenses. If you don’t already have an emergency fund, you can use the stimulus check to start your savings.

3. Make a payment on your mortgage principal

As a homeowner, one of the nicest things that you can do is pay off your home fully. The stimulus check can help you get there faster as you can make a payment towards your mortgage principal. 

4. Home improvements

As you spend more time at home, you may find that your home could do with some improvements. Whether you want to replace your appliances or fix your office space, the stimulus check could give you the money required to do it. With the housing market currently being so hot, you could also make some improvements to your home before you sell it for a profit.

5. Add it to your mortgage escrow. 

If you do not want to put your money in a savings account, you can put it in your mortgage escrow. That way, your insurance, and your taxes will be covered when the time for paying those comes.

6. Pay your estimated taxes. 

Taxes can be a hefty cost each year. As such, taking the time and either saving for your taxes ahead of time or paying off your estimated taxes in advance can help better prepare you financially for the future. This is why using your stimulus check to pay off your taxes early could result in you needing to spend less of your money later on.

What is the mortgage stimulus?

After Covid-19 led to many financial hardships for homeowners, the US government decided to set up a fund that could be used by states to provide citizens with a stimulus check. This was part of the American Rescue Plan act, and a total of $10 billion was given to the HAF with the purpose of helping homeowners. Each state was responsible for providing its citizens with the required amount, and the eligibility terms for the stimulus check were also set forth by each state. Most commonly, the following requirements needed to be met:

• Having a household income equal to or less than 150% of the median income in their area or state
• Being able to provide concrete proof of financial hardship experienced after January 21st of 2020 could cause by a variety of reasons, including healthcare costs, income reductions, or job loss.
• As of 2021, a further requirement was put in place that homeowners needed to have a mortgage balance of less than $548,250 

While over the years, the US government has set forth different mortgage relief programs to assist homeowners, there is currently no other mortgage stimulus that is available for homeowners through the government. Still, as a homeowner, you could try renegotiating the terms of your mortgage or refinancing in order to get more agreeable terms for your mortgage.

Summary

The stimulus checks were provided to homeowners as a response to the Covid-19 pandemic, which caused a number of people to lose their jobs, experience a big reduction in their income, or come face to face with high medical costs. As part of this program, state governments were responsible for appropriately allocating the fund to their citizens. The mortgage stimulus checks could be a great way for homeowners to pay off some of their debt, taxes, or bills, and even in some cases, it can be used to make necessary changes to the house that you own.