The Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) on Monday announced the extension and addition of new COVID-19 mortgage relief options for homeowners with FHA home loans.
FHA loan borrowers 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 stay in their homes.
“Our top priority is to help as many people and families as possible recover from the COVID-19 pandemic and keep their homes,” said Lopa Kolluri, U.S. Deputy Principal Deputy Secretary for Housing. “For the FHA, this means we will continue to work through all of our channels – mortgage agents, housing counselors and our other federal partners – to ensure we get the positive results distressed homeowners need.”
If you are having trouble making your payments, other options are also available, such as refinancing. Refinancing your mortgage when rates are near historic lows could save you hundreds of dollars on your monthly payment. Visit Credible to find your personalized rate from multiple lenders and see what your options are.
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FHA forbearance changes
The new forbearance offers will expire on October 1 or at the end of the national COVID-19 emergency, whichever is later. This will allow owners to go into forbearance until the end of the pandemic. Here are the new support updates from the FHA:
A new abstention period
The FHA is now offering up to six months COVID-19 forbearance to borrowers who request initial forbearance from October. These homeowners can also get up to six months of additional help if they are still experiencing financial difficulties after the initial forbearance period has ended.
Additional COVID-19 extensions
The FHA has announced that it will also provide up to six additional months of forbearance for an HECM extension to those who requested a forbearance between July 1 and September 30. These borrowers will now have up to 12 months of COVID-19 forbearance or HECM extension.
If you’re struggling to make your payments and don’t qualify for forbearance, another option to consider is mortgage refinancing. By lowering your mortgage interest rate, you can lower your monthly payments. Visit Credible to be prequalified in minutes without affecting your credit score.
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Homeowner Assistance Options
There are several options available to homeowners who need financial assistance to make their monthly payments. For example, the Treasury Department has a Homeowner Assistance Fund that can be used for mortgage payments, home 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 service agent to discuss loss mitigation options to keep their mortgage up to date. These options could include reducing the monthly payment or extending the term of the loan to allow for a lower mortgage payment.
Homeowners at risk of delinquency can also refinance their mortgage to reduce their monthly payments. Due to the changes made by the Biden administration, even some homeowners who were previously forborne due to financial hardship related to COVID-19 may still be eligible for mortgage refinancing if they meet certain conditions. If you want to refinance your mortgage, contact Credible to speak to a mortgage expert and get all of your questions answered.
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