Financial Assistance to Homeowners
March 2021: The American Rescue Plan approved by Congress includes $9.96 billion in funding to help homeowners avoid foreclosure through Homeowner Assistance Fund, along with $39 million to assist rural homeowners through USDA’s Section 502 and 504 direct loan programs. The Homeowner Assistance Fund will be administered by the US Department of Treasury and disbursed to the states and may be used to help protect homeowners from mortgage delinquencies, defaults, foreclosures, utility cutoffs, and to promote homeowners’ housing stability.
Foreclosure Protections and Mortgage Relief
Here is a useful federal guide and another useful guide to mortgage relief options and foreclosure protections enacted in response to the COVID-19 pandemic and its financial impacts on households. The following is a summary of some of these federal protections:
Feb 25, 2021: The Federal Housing Finance Agency has extended its moratorium on single-family mortgage foreclosures through at least June 30, 2021, for homeowners with Fannie and Freddie-backed single-family mortgages.
The FHA has extended its foreclosure and eviction moratorium through at least June 30, 2021, for homeowners with FHA-insured single-family mortgages covered under the CARES Act.
The USDA has extended its suspension of foreclosures and related evictions for borrowers with USDA Single-Family Housing and Direct and Guaranteed loans through June 30, 2021.
The VA has extended its moratorium on evictions and foreclosures for VA loans through June 30, 2021.
Forbearance rights: Under the CARES Act, borrowers with certain types of federally-backed or federally-funded mortgages on their single-family homes are eligible to request forbearance from payments for up to 180 days (6 months), with an option to extend for another 180 days. No late fees, interest, or penalties accrue during the forbearance period beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract. Here’s more information about the protections. The CARES Act did not include a date on when these protections expire so individual federal agencies have issued ongoing guidance and extensions of their forbearance policies.
On February 16, 2021, the Biden administration announced that the period for requesting a forbearance for FHA, VA, and USDA mortgage was extended to June 30, 2021. Borrowers who entered forbearance or before June 30, 2020, can request up to six months additional mortgage payment forbearance, in three-month increments.
Here’s a site with links to the different federal loan programs and their forbearance policies and how to find out if your loan is covered by one of these programs.
If you know of any updates that should be added to this list, please email CommunityAssistanceProject@law.utexas.edu.