FHA gives needy homeowners more time to request assistance

FHA gives needy homeowners more time to request assistance
Single-family homeowners with FHA-insured mortgages have until Dec. 31, 2020, to request an initial forbearance. (Source: Storyblocks)

TUCSON, Ariz. (KOLD News 13) - Homeowners experiencing a financial hardship as a result of the COVID-19 pandemic now have extra time to ask for help in the form of a forbearance of their FHA-insured mortgages.

The Federal Housing Administration on Wednesday, Oct. 21, announced single-family homeowners with FHA-insured mortgages have until Dec. 31, 2020, to request an initial forbearance from their mortgage servicer to forbear their mortgage payments for up to six months.

FHA requires mortgage servicers to provide up to six months of COVID-19 forbearance when a homeowner requests this assistance.

The entire announcement is below:

WASHINGTON – Today, the Federal Housing Administration (FHA) announced it is extending the date for single family homeowners with FHA-insured mortgages to request an initial forbearance from their mortgage servicer to forbear their mortgage payments for up to six months. Homeowners experiencing a financial hardship as a result of the COVID-19 pandemic may now request an initial forbearance through the end of this year, December 31, 2020. Previously, homeowners with FHA-insured mortgages needing assistance had until October 30, 2020, to request a COVID-19 forbearance from their mortgage servicer.

“Since day one President Trump has made it clear that no American should fear losing their home in the midst of this pandemic,” said Secretary Carson. “Today’s forbearance request extension for single family homeowners further solidifies that commitment. I can’t stress enough that this relief should be reserved for those that need it most. Americans who are capable of paying their mortgage on time should do so. The great American come back is in full force – if we work together, we can achieve and even surpass the economic prosperity we saw prior to the pandemic.”

FHA requires mortgage servicers to provide up to six months of COVID-19 forbearance when a homeowner requests this assistance, and up to an additional six months of forbearance for homeowners who request an extension of the initial forbearance. Homeowners needing assistance must engage with their servicer to obtain an initial forbearance or to obtain an extension of the initial forbearance.

“By providing this important extension, FHA seeks to assist those struggling with the continued financial effects of the COVID-19 pandemic,” said Assistant Secretary for Housing and Federal Housing Commissioner Dana Wade. “Our goal is to make sure that no homeowner loses their home unnecessarily as a result of this pandemic.”

“It’s always in a homeowner’s best interest to make their mortgage payments if they are able. But for those who are struggling right now, we urge them to engage with their servicer immediately. And, if your servicer contacts you, it is crucial that you respond to them to let them know if you need assistance,” said Deputy Assistant Secretary for Single Family Housing Joe Gormley. “The last thing FHA wants is for any homeowner to risk losing their homeownership investment if they are eligible for assistance.”

FHA requires mortgage servicers to:

  • Offer homeowners with FHA-insured mortgages mortgage payment forbearance when the homeowner requests it, with the option to extend the forbearance for up to a year in total. FHA does not require a lump sum payment at the end of the forbearance period.
  • Assess homeowners who receive COVID-19 forbearance for its special COVID-19 National Emergency Standalone Partial Claim before the end of the forbearance period. The COVID-19 National Emergency Standalone Partial Claim puts all suspended mortgage payment amounts owed into a junior lien, which is only repaid when the homeowner sells the home, refinances the mortgage, or the mortgage is otherwise extinguished.
  • Assess homeowners who are not eligible for the COVID-19 National Emergency Standalone Partial Claim for one of FHA’s COVID-19 expanded home retention solutions announced on July 8, 2020.

Copyright 2020 KOLD News 13. All rights reserved.