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For those concerned about paying their mortgages during the pandemic, the government has announced an extension of relief. Last week, the Federal Housing Finance Agency revealed that Fannie Mae and Freddie Mac will prolong their moratorium on foreclosures and evictions until at least August 31.
Originally set to end on June 30, the relief period created by the CARES Act has been extended. This applies to government-backed mortgages, including those from Fannie Mae, Freddie Mac, the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), the U.S. Department of Housing Development (HUD), and the U.S. Department of Agriculture (USDA).
(Not sure who owns your mortgage? The CFPB offers a guide to help you figure it out.)
This change acknowledges the reality of economic recovery during and after the pandemic. “Many industries were shut down for months and will take time to recover, leaving workers and business owners suffering financially,” said Beatrice de Jong, trends expert at Opendoor. Extending the moratorium recognizes that housing is one of the highest monthly expenses people face, offering relief from the stress of keeping a home.
If you’re struggling to make mortgage payments, the original option to request forbearance on your federally backed mortgage still stands: You can apply for a 180-day forbearance period, with an option to extend it for another 180 days.
Your lender cannot impose extra fees or penalties for delayed payments or for making arrangements to repay the deferred balance later. Additionally, no documentation is required to prove your financial hardship.
If your mortgage is not federally backed, you may still be eligible for a deferred payment arrangement by reaching out to your lender.
The extension could also provide peace of mind for renters, who may have more flexibility regarding their payments. “Many landlords operate as a small business and can’t afford to lose tenant payments without the risk of losing the property,” said de Jong. By easing the pressure on landlords, renters may feel less stressed about paying on time and in full.
