Rent and Mortgage Cancellation Act of 2020

To suspend obligations of residential renters and mortgagors to make payments during the COVID-19 emergency, and for other purposes. 1. Short title This Act may be cited as the Rent and Mortgage Cancellation Act of 2020 2. Suspension of obligations to make residential mortgage and rent payments (a) Rent payments (1) Suspension Notwithstanding any other provision of law, the obligation of each tenant household of a covered rental dwelling unit to pay rent for occupancy in such dwelling unit shall be suspended with respect to such occupancy during the COVID-19 suspension period. (2) Prohibitions (A) On fines No tenant or tenant household may be charged a fine or fee for nonpayment of rent in accordance with paragraph (1) and such nonpayment of rent shall not be grounds for any termination of tenancy or eviction. (B) On debt No tenant or tenant household may be treated as accruing any debt by reason of suspension of contribution of rent under paragraph (1). (C) On repayment No tenant or tenant household may be held liable for repayment of any amount of rent contribution suspended under paragraph (1). (D) On credit scores The nonpayment of rent by a tenant or tenant household shall not be reported to a consumer reporting agency nor shall such nonpayment adversely affect a tenant or member of a tenant household’s credit score. (b) Mortgage payments (1) Suspension Notwithstanding any other provision of law, the obligation of each mortgagor under a covered residential mortgage loan to make mortgage payments of principal and interest that become due during the COVID-19 suspension period is hereby suspended. (2) Requirements and prohibitions (A) On debt No mortgagor under any covered residential mortgage loan may be held responsible for payment of mortgage payments suspended under paragraph (1) or treated as accruing any debt by reason of suspension under such paragraph of the obligation to make mortgage payments. (B) On foreclosure A mortgagee under a covered residential mortgage loan (or servicer for such mortgagee) may not commence or continue any judicial foreclosure action or non-judicial foreclosure process or any action for failure to make a payment due under such mortgage that is suspended pursuant to paragraph (1). (C) On fees, penalties, and interest No fees, penalties, or additional interest beyond the amounts scheduled or calculated as if the mortgagor made all contractual payments on time and in full under the terms of the mortgage contract in effect as of the commencement of the COVID-19 suspension period shall accrue. (D) On credit scores The nonpayment of a mortgage payment by a mortgagor pursuant to suspension under paragraph (1) of the obligation to make such payment shall not be reported to a consumer reporting agency nor shall such nonpayment adversely affect a mortgagor’s credit score. (c) Notice The Secretary of Housing and Urban Development shall establish and carry out a system to notify all tenants of covered rental dwelling units, including tenants described in section 7(1)(B)(ii), and all mortgagors under covered residential mortgage loans, of the suspensions under paragraph (1) of subsections (a) and (b) of the obligations to make rental payments or mortgage payments, respectively, and of their right to pursue legal action pursuant to section 3. 3. Civil action (a) In general Any individual aggrieved by an adverse action taken by a lessor or mortgagee for exercising rights under section 2 may commence a civil action under this section against the lessor or mortgagee violating such section in an appropriate United States district court or State court not later than 2 years after such violation occurs for damages under subsection (b). (b) Damages; penalty Any lessor or mortgagee found to have taken adverse action against any lessee or mortgagor for exercising rights under section 2 shall be liable— (1) to the individual aggrieved by such violation, for any actual damages as a result of such adverse action; and (2) for a fine in the amount of— (A) $5,000, in the case of violation that is the first violation by such lessor or mortgagee; (B) $10,000, in the case of violation that is the second violation by such lessor or mortgagee; and (C) $50,000 or forfeiture of the property, in the case of violation that is the third or subsequent violation by such lessor or mortgagee. (c) Authority of court In an action brought under this section, the court— (1) may award preventative relief, including a permanent or temporary injunction or other order, to ensure the full rights granted by subsections (a) and (b) of section 2; and (2) shall award any prevailing plaintiff, other than the United States, reasonable attorney’s fee and costs. (d) Attorney General enforcement The Attorney General may bring a civil action in any appropriate United States district court against any individual who violates subsection (a) or (b) of section 2 for fines under subsection (b)(2) of this section. 4. Landlord relief fund (a) Establishment The Secretary of Housing and Urban Development shall establish and manage a Landlord Relief Fund (in this section referred to as the Fund (b) Application The Secretary shall provide for lessors of covered rental dwelling units to apply for reimbursement payments from the Fund, which applications shall include the certifications and binding agreements required pursuant to subsection (c). (c) Eligibility The Secretary may provide a payment under this section only with respect to covered rental dwelling units that meet all of the following requirements: (1) Fair rental requirements The lessor of the covered rental dwelling unit has made such certifications to, and entered into such binding agreements with, the Secretary as the Secretary considers necessary to ensure that during the 5-year period beginning upon initial receipt by such lessor of payment under this section for such dwelling unit, such dwelling unit shall be subject to the following requirements: (A) Rent freeze The monthly rent for the dwelling unit may not be increased from the amount of such rent charged as of the date of the enactment of this Act. (B) Just-cause evictions A tenant of the dwelling unit may be evicted only for just cause and only pursuant to advance written notice to the tenant of such just cause. (C) Source of income discrimination The lessor may not refuse to rent the dwelling unit, or discriminate in the renting of the dwelling unit, to a household based on the source of income of such household, including income under the program under section 8(o) of the United States Housing Act of 1937 ( 42 U.S.C. 1437f(o) (D) New vacancies The lessor shall coordinate with the public and other housing authorities for the jurisdiction within which the dwelling unit is located to make the dwelling unit available, upon any vacancy, to households assisted as described in subparagraph (C). (E) Admissions restrictions The lessor may not restrict tenancy of the dwelling unit on the basis of sexual identity or orientation, gender identity or expression, conviction or arrest record, credit history, or immigration status. (F) Arrearages The lessor may not collect an arrearage in rent owed by the tenant as of the expiration of such 5-year period. (G) Retaliation The lessor may not retaliate in any way against a tenant of the dwelling unit. (H) Debt collectors and credit reporting agencies The lessor may not report the tenant of the dwelling unit to a debt collector or provide any adverse information regarding the tenant to any credit reporting agency. (2) Prohibition on duplication of assistance Assistance may not be provided under this section with respect to any dwelling unit for which assistance is provided pursuant to section 5. (d) Amount (1) In general Subject to paragraph (2), the amount of a payment under this section with respect to a covered rental dwelling unit may not exceed the aggregate amount of rent for the dwelling unit suspended pursuant to section 2(a) and attributable only to days during the COVID-19 suspension period that the dwelling unit was occupied by a tenant otherwise required to pay rent for such occupancy. (2) Reimbursement for rent paid by tenants In making payments under this section with respect to any covered dwelling unit for which tenant made a payment of rent during the COVID-19 suspension period, the Secretary shall— (A) reduce the amount of the payment to the lessor under paragraph (1) by the amount of any such rent paid; and (B) make a payment to such tenant in the amount of any such rent paid. (e) Priority In making payments under this section, the Secretary shall establish a tiered system for priority for such payments based on assets, revenues, disclosure requirements, and profit status with respect to lessors. Such system shall provide priority for making payments to eligible lessors that are nonprofit organizations or entities and lessors having the fewest available amount of assets. (f) Recapture If a lessor violates any requirement with respect to a covered rental dwelling unit under any certification or agreement entered into pursuant to subsection (c)(2), the Secretary shall recapture from the lessor an amount equal to the entire amount of assistance provided under this section that is attributable to such dwelling unit and cover such amount recaptured into the Fund. (g) Authorization of appropriations There is authorized to be appropriated for the Landlord Relief Fund established pursuant to this section such sums as may be necessary to reimburse all lessors for all rent payments suspended pursuant to section 2(a). 5. Lender Relief Fund (a) Establishment The Secretary of Housing and Urban Development shall establish and manage a Lender Relief Fund (in this section referred to as the Fund (b) Application The Secretary shall provide for mortgagees under covered residential mortgage loans to apply for reimbursement payments from the Fund, which applications shall include the certifications and binding agreements required pursuant to subsection (c). The Secretary shall provide that an eligible mortgagee may apply for assistance from the Fund only once with respect to any covered residential mortgage loan. (c) Eligibility The Secretary may provide a payment under this section only with respect to covered residential mortgage loans that meet all of the following requirements: (1) Fair and inclusive lending requirements The mortgagee for the mortgage loan has made such certifications to, and entered into such binding agreements with, the Secretary as the Secretary considers necessary to ensure that during the 5-year period beginning upon initial receipt by such mortgagee of payment under this section for such mortgage loan, such mortgagee shall be subject to the following requirements: (A) Reporting on lending The mortgagee shall report annually to the Secretary such detailed information regarding residential mortgage loans made by such mortgagee as the Secretary shall require, including the race, ethnicity, age, and credit score of mortgagors, the zip codes of properties for which mortgages were made, and the interest rates and other loan pricing features of such mortgage loans. (B) Reporting on lender The mortgagee shall report annually to the Secretary such detailed information regarding the mortgagee as the Secretary shall require, including the location of the offices of the mortgagee, and practices and systems for outreach to and referral of borrowers. (2) Prohibition on duplication of assistance Assistance may not be provided under this section with respect to any dwelling unit subject to a covered residential mortgage loan for which assistance is provided pursuant to section 4. (d) Amount (1) In general Subject to paragraph (2), the amount of a payment under this section with respect to a covered residential mortgage may not exceed the aggregate amount of mortgage payments under the mortgage suspended pursuant to section 2(b). (2) Reimbursement for mortgage payments made by mortgagors In making payments under this section with respect to any covered residential mortgage loan for which the mortgagor made a mortgage payment during the COVID-19 suspension period, the Secretary shall— (A) reduce the amount of the payment to the mortgagee under paragraph (1) by the amount of any such mortgage payments paid; and (B) make a payment to the mortgagor in the amount of any such mortgages payments paid. (e) Authorization of appropriations There is authorized to be appropriated for the Lender Relief Fund established pursuant to this section such sums as may be necessary to reimburse all lessors for all rent payments suspended pursuant to section 2(b). 6. Affordable Housing Acquisition Fund (a) Establishment The Secretary of Housing and Urban Development shall establish and manage an Affordable Housing Acquisition Fund (in this section referred to as the Fund (1) ensure that tenants have access to safe and habitable housing conditions regardless of their landlords’ ability to pay for repairs and maintenance during and after the COVID-19 pandemic; (2) prevent financial hardship for rental property owners; and (3) prevent a mass exit in the rental housing market that results in massive corporate purchases similar to the 2008 economic crisis. (b) First right of purchase (1) Notice to secretary During the 5-year period beginning upon the date of the enactment of this Act, the owner of a multifamily housing property may not sell or transfer ownership of such property unless— (A) the owner has notified the Secretary, in accordance with such requirements as the Secretary shall establish, of the owner’s intent to sell or transfer the property; (B) a period of 60 days, beginning upon provision of such notice to the Secretary, has elapsed; and (C) if during such 60-day period any eligible purchaser under paragraph (3) applies to the Secretary for purchase assistance under subsection (c) with respect to such property, the Secretary has approved or denied such application and, if approved, the eligible purchaser has made a bona fide offer to the owner to purchase such project in the amount determined under subsection (c)(3)(A). (2) Notice to eligible purchasers Upon provision to the Secretary of notice under paragraph (1)(A) regarding a multifamily housing project, the Secretary shall take such actions as may be necessary to provide notice to eligible purchasers of the owner’s intent to sell or transfer the property. (3) Eligible purchasers For purposes of this section, an eligible purchaser under this paragraph shall be a nonprofit organization, a public housing agency, a cooperative housing association, a community land trust, or a State or unit of local government or an agency thereof, as such terms are defined by the Secretary. (c) Purchase assistance (1) Application The Secretary shall provide for eligible purchasers to apply for assistance from the Fund to cover the cost of acquisition of a multifamily housing project for which notice has been submitted pursuant to subsection (1)(A). (2) Criteria The Secretary shall establish such criteria and preferences as the Secretary considers appropriate to select an eligible purchaser for assistance under this section in cases in which more than one approvable application for such assistance is submitted with respect to a single multifamily housing project. (3) Amount Pursuant to an application submitted under paragraph (1) with respect to a multifamily housing project, the Secretary may provide assistance from the Fund on behalf of eligible purchaser submitting such application, in an amount equal to the purchase price for the project agreed to under subparagraph (A) of this paragraph, but only if the Secretary determines that— (A) such eligible purchaser and the owner of such multifamily housing project have voluntarily agreed to a sale of such project to the eligible purchaser for an amount not exceeding the fair market value of the project as of the time of provision of assistance from the Fund for purchase of the project, as determined by the Secretary; and (B) the eligible purchaser has made the certifications and entered into the agreements required under subsection (d) with respect to the project. (d) Affordable housing restrictions The certifications and agreements required under this subsection with respect to a multifamily housing project are such certifications to, and binding agreements with, the Secretary as the Secretary considers necessary to ensure that during the useful life of the project the project will comply with the following requirements: (1) Affordable housing The project shall comply with the requirements under section 215(a) of the Cranston-Gonzalez National Affordable Housing Act ( 42 U.S.C. 12745(a) (2) Just-cause evictions A tenant of the project may be evicted only for just cause and only pursuant to advance written notice to the tenant of such just cause. (3) Source of income discrimination A prospective tenant household of the project may not be refused rental of a dwelling unit in the project, and a prospective tenant household or tenant household may not be discriminated against in the renting of a dwelling unit in the project, based on the source of income of such household, including income under the program under section 8(o) of the United States Housing Act of 1937 ( 42 U.S.C. 1437f(o) (4) Admissions restrictions Tenancy of dwelling units in the project may not be restricted on the basis of sexual identity or orientation, gender identity or expression, conviction or arrest record, credit history, or immigration status. (5) Supportive services Residents of the project shall be provided with free, voluntary supportive services that help address the needs of those experiencing chronic homelessness or housing instability, including access to healthcare, employment or education assistance, childcare, financial literacy education, and other community-based support services, as the Secretary shall require. (6) Democratic control Tenants of the project shall have control of living and operating conditions in the project through a democratically elected resident board or council. (e) Recapture If an eligible purchaser violates any requirement with respect to a multifamily housing project purchased with assistance provided from the Fund under any certification or agreement entered into pursuant to subsection (d), the Secretary shall recapture from the eligible purchase an amount equal to the amount of such assistance provided and shall cover such amount recaptured into the Fund. (f) Authorization of appropriations There is authorized to be appropriated for the Affordable Housing Acquisition Fund established pursuant to this section such sums as may be necessary— (1) for assistance under this section to fund acquisition of multifamily housing projects by eligible purchasers; and (2) for each fiscal year, for assistance for the operation and maintenance of eligible properties purchased with assistance provided from the Fund. 7. Definitions For purposes of this Act, the following definitions shall apply: (1) Covered rental dwelling unit The term covered rental dwelling unit (A) as a primary residence; and (B) (i) pursuant to a residential lease; or (ii) without a lease or with a lease terminable at will under State law. Such term includes such a dwelling unit in multifamily housing, single-family housing, a condominium unit, a unit in cooperative housing, a dwelling unit that is occupied pursuant to a sublease, a single-room occupancy unit, and a manufactured housing dwelling unit and the lot on which it is located. (2) Covered residential mortgage loan The term covered residential mortgage loan (3) COVID-19 suspension period The term COVID-19 suspension period 42 U.S.C. 4121 (4) Multifamily housing project The term multifamily housing project (5) Secretary The term Secretary 8. Regulations The Secretary may issue any regulations necessary to carry out this Act.

Summary: Rent and Mortgage Cancellation Act of 2020 This bill provides housing assistance during the COVID-19 (i.e., coronavirus disease 2019) public health emergency. Specifically, the bill suspends rental and mortgage payments for primary residences for a period lasting until 30 days after the termination of the federal emergency declaration relating to COVID-19. The Department of Housing and Urban Development (HUD) must establish funds to reimburse lessors and lenders for payments suspended under the bill. In addition, HUD must establish an Affordable Housing Acquisition Fund to support the acquisition of multifamily housing projects by nonprofit organizations, public housing agencies, cooperative housing associations, community land trusts, and state and local governments. For a five-year period, entities that are approved for such assistance shall be provided the first right of purchase with respect to such projects.