FHA Announces New COVID-19 Forbearance Options

FHA Announces New COVID-19 Forbearance OptionsThe FHA recently announced both new and extended COVID-19 relief options for borrowers who are recently or newly struggling to make their mortgage payments due to the ongoing pandemic and for senior homeowners with Home Equity Conversion Mortgages (HECMs) that need assistance to remain in their homes.

In its press release, the FHA mentioned that these measures were implemented in response to COVID-19’s continued impact on borrowers nationwide and are part of the agency’s continuing evolution of its pandemic-related polices to ensure the right tools are in place to help those facing financial difficulties as a result of the Coronavirus.

The FHA’s new and extended relief options became effective immediately and include the following:

  • A new COVID-19 Forbearance or HECM Extension Period for Borrowers Newly Affected by the Pandemic: The FHA will now provide up to 6 months of forbearance for borrowers requesting an initial COVID-19 Forbearance or HECM Extension from their mortgage servicer between October 1, 2021 and the end of the COVID-19 National Emergency, as well as an additional 6 months if the forbearance or HECM extension is exhausted and expires before the end of the COVID-19 National Emergency.
  • An Additional COVID-19 Forbearance or HECM Extension Period for Borrowers Recently Seeking Assistance: The FHA will now provide up to 6 months of additional forbearance for borrowers who requested, or will request, an initial COVID-19 Forbearance or HECM Extension from their mortgage servicer between July 1, 2021 and September 30, 2021 – allowing these borrowers to receive a maximum of 12 months of COVID-19 Forbearance or HECM Extension.

For more information, check out the FHA’s press release.

 

Sources:
Federal Housing Administration (FHA) – hud.gov
DS News – dsnews.com