The FHA and HUD have announced new modifications to coronavirus relief options for FHA borrowers in need of foreclosure avoidance help during the pandemic.
Effective immediately, HUD has implemented a variety of modifications:
- Extended foreclosure and eviction moratoriums now expire June 30, 2021;
- Deadline for “first legal action” and “Reasonable Diligence Time Frame” is extended to 180 days;
- COVID-19 Forbearance start dates are now extended to June 30, 2021;
- HECM extension period is extended to June 30, 2021;
- HUD now offers up to two additional three-month COVID-19 Forbearance periods or HECM extension periods “for certain Borrowers”;
- HUD now allows additional Borrowers, “regardless of delinquency status or participation on a COVID-19 Forbearance” to apply for FHA’s COVID-19 Loss Mitigation Options;
- HUD has removed the restriction on “Borrowers receiving more than one COVID-19 Home Retention Option” according to the official site.
The FHA and HUD announced further extensions of its current programs on February 16th, 2021.
A press release from the Department of Housing and Urban Development states that HUD is “reviewing its policies and requirements in light of the ongoing and evolving challenges facing Borrowers and industry partners”.
The results of that review? HUD is “further extending its foreclosure and eviction moratorium as well as the associated deadline for first legal action and Reasonable Diligence Time Frame”.
HUD originally announced a COVID-19-related foreclosure moratorium in March of 2020. Since that time the agency extended the deadline to apply for relief multiple times.
These modifications and extensions of the original moratorium offer more protection to Borrowers facing foreclosure “during a time when people are advised to remain in their homes and be socially distanced.”
A very important part of HUD’s coronavirus relief efforts has been COVID-19 loan forbearance, which HUD offered in the form of either reduced monthly mortgage payments or suspended payments.
In all cases, the borrower and lender must work together to come up with a plan for those who need this relief.
COVID-19 Forbearance and the COVID-19-based Home Equity Conversion Mortgage Extension Period “provide for an initial period of up to six months of relief and an extension of up to an additional six months”
Borrowers should know that all FHA home loan, HECM loan, o rother forbearance issues require the participation of your lender, so you will need to contact your loan servicer to get started.
If you need assistance, do not delay contacting the lender–it’s best to contact your loan officer at the first indication you are having financial trouble. Do not wait until you have missed a house payment.