IThe National Association of Independent Landlords (NAIL) has published a report showing that landlords who worked with government employees who were unable to pay their rent during the recent government shutdown have placed their own credit ratings at risk.
Without rent payments, thousands of landlords have been unable to cover mortgages, repairs, utility bills, insurance, and in some cases, their own living expenses.
Many landlords are small operators who own one or two properties and have mortgages that have to be paid every month.
Housing represents the largest expense for most families. The 800,000 furloughed federal workers owed $189 million in rent and $249 million in mortgages during the month they were not able to work.
Landlords who missed mortgage payments during the shutdown generally do not face foreclosure since banks usually allow up to four missed payments before a loan goes into default. However, even one late payment can impact a credit rating for up to seven years. In addition, although laid off workers who were unable to pay rent were unlikely to be evicted, their credit could also suffer if they didn’t keep landlords informed of their financial situations and set up payment plans.
Like so many others who were hurt during the pointless shutdown, small landlords took losses that will take some time to recover from. Hopefully, there will not be a repeat of this shameful episode in the future.