The GSEs and government agencies that back certain home loans have announced forbearance plans specific to the coronavirus pandemic. Forbearance lets you make a reduced payment or no payment at all for a set amount of time. Interest accrues, and the skipped amount needs to be paid after the forbearance period ends.
Here are the mortgage forbearance programs available to homeowners affected by COVID-19:
Borrowers are eligible for up to 12 months of forbearance, which will not be reported to credit bureaus. Late fees and penalties for missed payments are waived, although it’s better to work with your lender to set up a forbearance plan than to simply miss a payment. Find more info on the Freddie Mac website.
Borrowers are eligible for up to 12 months of reduced or suspended mortgage payments. Loans in forbearance won’t incur late fees or be reported to the credit bureaus — so if your mortgage is backed by Fannie Mae, be sure to contact your lender before you miss a payment. After the forbearance period, repayment plans will maintain or reduce monthly payments. See more on Fannie Mae’s website.
If you have an FHA loan and your ability to pay has been affected by the economic downturn, contact your lender to discuss your options. The FHA always has several mortgage relief programs in place. This includes standard mortgage forbearance lasting up to six months and special forbearance for unemployment (which can last a year or more). Forbearance is typically reported to credit bureaus, though in a statement the FHA encouraged lenders to “consider the impacts of COVID-19 on borrowers’ financial situations. ”Find more info on the HUD website.
The VA has not implemented new policies for the current situation, but has encouraged VA lenders to help borrowers impacted by COVID-19 utilize existing mortgage relief programs. This includes special forbearance, the duration of which can vary based on the homeowner’s situation. The VA has also urged lenders to waive late charges and suspend credit bureau reporting, but this is not currently required. See mortgage assistance information on the VA website.
The provided resources include links to external websites or applications that are governed by their own privacy policies or information collection practices, which may be substantially different from STCollaborative. We encourage you to review the privacy policies and information collection practices of any external websites and apps before use with children or students.