The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress earlier this year included providing assistance for homeowners impacted by the COVID-19 financial hardships. The CARES Act required federal agencies to allow homeowners with federally-backed loans to delay making mortgage payments, without penalty or interest, for 6 to 12 months, if the homeowners demonstrated their ability to pay had been impacted by the economic downturn caused by the pandemic.
If you are behind on your home mortgage payment due to the coronavirus, you may be eligible under the CARES Act to request a forbearance for up to 180 days. The deadline to apply for an initial forbearance for some mortgages is March 31, 2021, so you must act NOW.
Loan types that are federally backed and therefore are required to be provided relief include:
- Conventional loans purchased or securitized by Fannie Mae and Freddie Mac
- Federal Housing Administration (FHA), including Home Equity Conversion Mortgage (HECM)
- U.S. Department of Veteran Affairs (VA)
- U.S. Department of Agriculture (USDA) Rural Development (RD) loans, including direct and guaranteed loans
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Contact your lender or servicer to find out if you have a loan type that is eligible under the CARES Act. Click here to determine who owns and services your mortgage.
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Ask them what type of loan you have, whether it is a federal or GSE-backed mortgage eligible under the CARES Act. If it is, request an initial 180-day forbearance.
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Note: Once approved, if you continue to experience a financial hardship as you approach the end of your initial 180-day forbearance, you can request an additional 180-day forbearance, however you MUST contact your loan servicer once again to request this additional 180 days.
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Note: not all federally backed loans are currently subject to the stated deadline of March 31, 2021.
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If your mortgage is not a federal or GSE-backed mortgage, talk to your lender or servicer to understand options available to you.
- To find out more about protections for current homeowners or learn more about forbearance, visit Consumer Financial Protection Bureau (CFPB)
What is forbearance?
- Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited period of time. Forbearance doesn’t erase what you owe. You are still required to repay any missed/reduced payments in the future. The CARES Act does not specify how each lender chooses to incorporate their forbearance policy, so struggling homeowners should reach out to their servicer or lender.
Find a foreclosure prevention advisor who can help you navigate your situation for free
- The Minnesota Homeownership Center oversees a network of professional foreclosure advisors who offer unbiased, confidential services to struggling homeowners free of charge.
- They can help you work with your lender or loan servicer, review your finances and much more. Remember, it’s always important to act early as waiting can severely limit your options!
- Find a foreclosure advisor by going to hocmn.org/search-help or by calling 651-659-9336.
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