COVID-19 and Mortgage Relief: Understanding Federal Forbearance Programs
If you find yourself out of work during the COVID-19 epidemic, and are afraid that you won’t be able to make your mortgage payments, there is help available. Check out this blog on Federal Mortgage Forbearance during COVID-19, how this Federal Mortgage Forbearance works and much more.
The US government, as a part of the CARES act signed into law March 27, 2020, has relief options for mortgage holders with federally-backed mortgages.
How This Federal Mortgage Forbearance COVID-19 Works
A borrower needs to request forbearance from their servicer. If you’re not sure who your loan servicer is, you’ll need to figure out who your servicer is by going to your mortgage lender. They’ll give you the information you need.
Then, you will need to affirm that you are experiencing financial hardship due to the crisis. This will likely not require much proof, however they may ask for termination letters or bank statements.
Once you do, your mortgage will be in forbearance for the next six months. They will not need to make payments for this period.
Interest will continue to accrue, however no interest payments will be required during this period.
In addition, all new foreclosures of homes with federally backed mortgages are suspended.
Related: Common Scams to Avoid in COVID-19
Does This Apply To My Mortgage?
If you have a federally backed mortgage loan (a Fannie Mae or Freddie Mac mortgage loan), then this does apply and you will not have to make payments.
If you don’t know whether or not your mortgage is backed by Fannie Mae or Freddie Mac, you will need to look it up online.
- Fannie Mae: https://www.knowyouroptions.com/loanlookup
- Freddie Mac: https://myhome.freddiemac.com/resources/loanlookup
You may be eligible for additional unemployment relief, however, which may be able to cover the cost of your mortgage.
Private Mortgage Forbearance
Private mortgage servicers may also be offering relief. However, they’re not getting government support as of April 2020.
If you are experiencing financial hardship due to the crisis, call your servicer. They may be able to help.
