Mortgage forbearance during COVID-19: What to know and what to do
Many homeowners are struggling to make mortgage payments as a result of the coronavirus pandemic. Here is information you can use, about your options and your rights.
If you are facing money struggles, you are not alone
Help is available. The majority of homeowners are eligible for forbearance for a coronavirus-related financial hardship. Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited time while you regain your financial footing.
Forbearance is not automatic. You must request it from your mortgage servicer. This might seem like a big step to take, but taking action now can help you pause your payments and avoid foreclosure.
Forbearance ends with a payment plan, not a lump-sum payment
Homeowners who receive COVID hardship forbearance are not required to repay their paused payments in a lump sum once the forbearance period ends. You can talk with your mortgage servicer, or start with a HUD-approved housing counseling agency, to discuss a repayment plan that works for your situation.
Most servicers must offer forbearance, and the others can provide options
The COVID hardship forbearance applies to all federally backed and federally sponsored mortgages, which includes HUD/FHA, VA, USDA, Fannie Mae, and Freddie Mac mortgage loans. This includes most mortgages. Homeowners with federally backed loans have the right to ask for and receive a forbearance period for up to 180 days—which means you can pause or reduce your mortgage payments for up to six months. Additionally, you can request an extension of forbearance for up to 180 additional days, for a total of 360 days.
UPDATE: Since this video was released, federal agencies have provided more options to extend forbearance.
- If your mortgage is backed by : 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 , , or : 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.
Other mortgages may also provide similar forbearance options. If you are struggling with payments, servicers are generally required to discuss relief options with you, whether or not your loan is federally backed.
Getting through to your servicer could be easier than you think
In the early days of the pandemic, homeowners reported trouble getting through to servicers by telephone. Now, many mortgage servicers have increased their capacity to respond to customers. Patience is still encouraged, and you may be able to reach your servicer by telephone or online. Some servicers may have websites for you to understand your options and request forbearance.
Mortgage servicers generally cannot ask for proof of hardship
You can ask for forbearance and tell your servicer that you are going through a financial hardship because of the pandemic. If you have a federally backed loan, the mortgage servicer is not permitted to ask you for proof of hardship.
You do not need to pay for help with forbearance options
HUD-approved housing counseling agencies and the counselors they employ provide their services at no cost to borrowers requesting forbearance. You should steer clear of scams – especially offers to help that come with upfront fees – whether the offer is for your mortgage or for other services, like assistance with unemployment benefits or credit repair.
No need to wait—ask for help now
If you have a home loan backed by , , or your mortgage servicer is authorized to approve initial COVID hardship forbearance requests until the COVID-19 National Emergency is officially over. Previously the deadline was set for September 30, 2021.
In any case, taking action without delay can help you take control of your finances.