The Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) announced Monday the extension and addition of new COVID-19 mortgage relief options for homeowners with FHA home loans.
Borrowers of FHA loans who are struggling to make their monthly mortgage payments and are at risk of foreclosure due to the COVID-19 pandemic will be able to use Home Equity Conversion Mortgages (HECMs) to remain in their homes.
"Our top priority is to help as many individuals and families as possible to recover from the COVID-19 pandemic and keep their homes," Lopa Kolluri, U.S. principal deputy assistant secretary for housing, said. "For FHA, this means that we will continue to work through all of our channels – mortgage servicers, housing counselors and our other federal partners – to ensure we get the positive outcomes struggling homeowners need."
If you're struggling to make payments, there are also other options available, such as refinancing. Refinancing your mortgage while rates are near all-time lows could potentially help you save hundreds of dollars on your monthly payment. Visit Credible to find your personalized rate from multiple lenders and see what your options are.
FHA forbearance changes
The new forbearance offerings will expire on Oct. 1, or when the COVID-19 National Emergency ends, whichever comes later. This will allow homeowners to enter forbearance through the end of the pandemic. Here are the new assistance updates from the FHA:
A new forbearance period
The FHA is now offering up to six months of COVID-19 forbearance for borrowers who request initial forbearance beginning in October. These homeowners can also get up to six months of additional assistance if they are still struggling financially once the initial forbearance period ends.
Additional COVID-19 extensions
The FHA announced it will also provide up to six months of additional forbearance for a HECM extension for those who requested forbearance between July 1 and Sept. 30. These borrowers will now have up to 12 months of COVID-19 forbearance or HECM extension.
If you're struggling to make payments and don’t qualify for forbearance, another option to consider is a mortgage refinance. By lowering your mortgage interest rate, you can decrease your monthly payments. Visit Credible to get prequalified in minutes without affecting your credit score.
Assistance options for homeowners
There are several options available for homeowners who need financial assistance in order to make their monthly payments. For example, the Treasury Department has a Homeowner Assistance Fund that can be used for mortgage payments, homeowner’s insurance, utility payments and other housing purposes.
Other options include modifying their current home loan. If homeowners cannot make their monthly payments, they should contact their servicer to discuss loss mitigation options to keep their mortgage current. These options could include lowering the monthly payment or lengthening the loan term to allow for a lower mortgage payment.
Homeowners at risk of delinquency can also refinance their mortgage to lower their monthly payments. Due to changes made by the Biden administration, even some homeowners who were previously in forbearance due to COVID-19-related financial hardship could still qualify for a mortgage refinance if they meet certain qualifications. If you're interested in refinancing your mortgage, contact Credible to speak to a home loan expert and get all your questions answered.
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