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Payment Relief For Federally Backed Mortgages Was Just Extended

Published June 23, 2020

4 minute read

Devon Taylor

By Devon Taylor

As the COVID-19 pandemic stretches past the 12-month mark, many homeowners still find themselves struggling financially. If you have lost your job or seen reduced income, you may still be eligible for mortgage forbearance. The good news is that you likely still qualify, even if you already accepted mortgage relief earlier in the pandemic.

According to the federal government’s Consumer Finance website, you can still request forbearance for your mortgage payments. Like last time, though, this is only good for federally backed mortgages. That includes HUD/FHA, VA, USDA, Fannie Mae, and Freddie Mac mortgage loans. You can ask for up to 180 days of forbearance. That means your payments will be paused or reduced. You can then request another 180 days, if you are still struggling to pay.

Extra Extensions

After the original 360 days, it may be possible to request up to six more months of mortgage forbearance. Here are the details:

  • “If your mortgage is backed by Fannie Mae or Freddie Mac : You may request up to two additional three-month extensions, up to a maximum of 18 months of total forbearance. But to qualify, you must have received your initial forbearance on or before February 28, 2021. Check with your servicer about the options available.”
  • “If your mortgage is backed by HUD/FHA , USDA , or VA : You may request up to two additional three-month extensions, for up to a maximum of 18 months of total forbearance. But to qualify, you must have received your initial forbearance on or before June 30, 2020. Check with your servicer about the options available.”

Odds and Ends

Here’s a few more important things to be aware of. First, it’s generally much easier to get through to someone who can help you now. In the early days of the pandemic, call centers were slammed with requests. That initial demand has died down, plus many companies have made efforts to increase their capacity to respond to customers.

Secondly, most mortgage providers can’t ask you for proof of financial hardship. That can be a huge stress relief, especially for self-employed individuals. Just keep in mind that forbearance isn’t actually avoiding paying your mortgage or forgiving debt. It’s just a pause. You’ll still have to pay it eventually.

Finally, know that you should never have to pay anything to get help with mortgage forbearance claims. If someone you’re dealing with mentions a fee or other payment required, stop communicating with them immediately. Federally backed mortgage servicers provide counselors and customer service agents at no-cost.

[This article was originally published in June 2020. It was updated in April 2021 to reflect to ongoing mortgage relief available as the pandemic enters a second year.]

–Original Article Below–

If you received payment relief for your mortgage over the past few months, we have good news. That relief will be extended if you still need it, along with a few extra conditions. The Federal Housing Finance Agency recently announced that federally backed mortgages will continue to allow homeowners to seek relief from payments. It also prevents foreclosures and evictions until “at least” August 21, 2020.

The original mortgage relief — enacted as part of the CARES Act to combat the financial struggles of the pandemic — was set to expire at the end of June. The relief will now extend for two extra months. It applies to federally backed mortgages from Fannie Mae and Freddie Mac, the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), the Department of Housing Development (HUD), or the U.S. Department of Agriculture (USDA).

Despite many states beginning stay-at-home measures in mid-March, the pandemic continues to affect Americans nationwide. Many citizens are still without work. If they are able to return to work, it may be with reduced hours as things slowly open back up. If you’re struggling to pay your mortgage, you can apply for a forbearance. It will grant you an 180-day extension. Later, you can request another 180-day extension if you still need it.

What About Non-Federally Backed Mortgages?

If you don’t have one of the above mentioned mortgages, things get trickier. Every major bank and financial institution has offered some sort of mortgage relief. However, they aren’t all the same. The best way to find out what programs exist to help you stay afloat is still to call you mortgage provider. They will explain all of your available options to you. The good news is that there’s almost zero chance of eviction or foreclosure due to the current circumstances.

What If You Rent?

A growing number of Americans rent their homes instead of owning them outright. While skyrocketing housing prices in populated areas is whole different economic concern, renters can also breathe a sigh of relief. The mortgage relief extension means that landlords won’t be scrambling to pay their real estate obligations. In turn, that should give any renters who are suffering financially a bit of relief from rent payments. Again, you’ll need to contact your individual landlord (or property management company) to find out what your options are. But if they aren’t being squeezed for mortgage payments, they don’t need to squeeze you for full rent payments.

Mini Home, Coins, Bag of Money, & Alarm Clock

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Devon Taylor

Managing Editor

Devon is an experienced writer and a father of three young children. He's simultaneously trying to build college funds and plan for an eventual retirement. He's been in online publishing since 2013 and has a degree from the University of Guelph. In his free time, he loves fanatically following the Blue Jays and Toronto FC, camping with his family, and playing video games.

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