Resources to help homeowners impacted by the coronavirus pandemic
While some areas of the United States are starting the work of re-opening after the COVID-19 disaster, many impacted homeowners still face financial hardships.
Stimulus checks and other available assistance programs may not be enough if you are one of the many homeowners financially impacted by the COVID-19 pandemic and concerned about how to pay your mortgage for the next few months.
Coronavirus Mortgage Relief Program Options
As part of the CARES (Coronavirus Aid, Relief, and Economic Security) Act, you may have relief available to you for your mortgage. Here’s a rundown on who can qualify and what’s included in the relief package.
Who can qualify for the CARES Act mortgage relief program?
- Federally backed mortgage -To qualify for the CARES Act mortgage relief – you must have a federally backed mortgage loan. This includes FHA mortgages and deeds processed through Fannie Mae and Freddie Mac, insured by HUD, the VA, or the USDA, or made directly by the USDA. If your mortgage is a conventional loan, see Mortgage Relief for Conventional Loans below for more information.
- Must currently be delinquent on payments– Additionally, to be eligible for immediate relief, you must already be delinquent on your loan. If you are current on your mortgage loans but concerned about your ability to make future payments due to COVID-19, see section see Mortgage Relief for Conventional Loans below for more information.
- Live within the disaster area- Federal requirements for disaster relief state that you must live within the boundaries of the declared disaster. In this case, the entire U.S. is affected.
- Financially impacted by COVID-19- If you meet the above criteria, additional stipulations for qualifying include at least one of the following:
-If someone in your household has been affected by the virus and has died, is missing, or is incapacitated
-If you are unable to make payments on your mortgage because you are financially impacted due to unemployment, reduced hours, can’t get to work due to quarantined workplace, etc.
If you meet the above criteria, you are qualified for relief assistance through the CARES Act Disaster Relief program.
What is the CARES Act mortgage relief program?
The financial assistance disaster relief is part of the HUD’s (Department of Housing and Urban Development) Federal Housing Administration’s Disaster Relief program. Additionally, the new federal CARES Act puts in place two protections for homeowners with federally backed mortgages.
First, your lender or mortgage servicer may not foreclose on you for 60 days after March 18, 2020. The CARES Act prohibits lenders explicitly from beginning a judicial or non-judicial foreclosure against you, or from finalizing a foreclosure judgment or sale during this period of time. This clause is known as the 90-day foreclosure moratorium.
Forbearance or deferment of payments
Second, if you experience financial hardship during the coronavirus pandemic, you have a right to request a forbearance or deferment on your mortgage for up to 180 days (with a potential extension of another 180 days).
A forbearance is when your mortgage servicer allows you to reduce or pause your mortgage payment for a limited time. Once the time period is up, you are required to repay any missed or reduced payments, either in one lump sum or spread out over an agreed-upon time. Additionally, you may be responsible for interest accrued during the forbearance period. Your terms depend on your mortgage lender and your situation. (Be extra sure you know what you are agreeing to with the lender.)
A better option is to ask for a mortgage deferment. Like forbearance, your mortgage loan is paused for a specific period of time, and you are required to make up the payments. However, unlike forbearance, deferred payments are added to the end of the loan once you resume your payments. You continue with your regular payment amounts and are not required to make up upfront payments for missed installments.
Note: If you qualify for mortgage relief, or you will not be able to make your next payment, you should call your mortgage servicer immediately. Your mortgage lender or servicer is the company listed on your monthly mortgage statement. Once your lender knows the pandemic has financially impacted you, they can start processing the documentation necessary to stop any foreclosure actions during the moratorium period and develop a forbearance or deferment plan. Additionally, your lender may be able to evaluate you for any loss mitigation assistance to help you retain your income.
Mortgage Relief for Conventional Home Loans
For homeowners with a conventional mortgage loan, there may be disaster relief options available from your specific mortgage lender. If you have been financially impacted by the COVID-19 pandemic and concerned about your ability to make your payment, your lender can work with you on payment options. Call your lender directly and ask about the programs they have available.
Resources for Homeowners Impacted by the Coronavirus Pandemic
For more help, we’ve gathered a few resources additional resources to help you and your family during the COVID-19 pandemic.
U.S. Department of Housing and Urban Development (HUD)- COVID-19 Disaster Relief options for FHA homeowners
FHFA Disaster Relief – Mortgage relief for homeowners and renters impacted by COVID-19
Freddie Mac – COVID-19 support and relief options for mortgages owned by Freddie Mac
Consumer Finance Protection Bureau– Guide to coronavirus mortgage relief options
Mortgage Bankers Association –Disaster Recovery Guide for Homeowners
Disaster Financial Assistance – Information for workers and small business owners about food, housing, and help to pay bills
Government Response & Resources for COVID-19- View information about government actions and programs related to COVID-19, stimulus payments, health and safety, travel, taxes, grants, education, housing, federal properties, elections, federal courts, and communications
SBA Home and Property Disaster Loans– U.S. Small Business Administration information regarding COVID-19 resources
CDC COVID-19 – Centers for Disease Control and Prevention updates on COVID-19
If you have any questions about homeowner mortgage assistance programs or need to talk about buying or selling a home, feel free to call us at 214-597-2985 any time!
About the Judi Wright Team
Judi Wright/The Judi Wright Team is a real estate group specializing in the suburbs of Frisco, Plano, and surrounding areas. Named the “Best Realtor in Dallas,” by D Magazine thirteen times and a Five Star Realtor with Texas Monthly eight times. Judi is also a Company-Wide Top Performer with Ebby Halliday, a Berkshire Hathaway affiliate.