With the coronavirus pandemic still roiling the U.S. economy, the federal government is giving homeowners an additional two-month reprieve from foreclosures. The Federal Housing Finance Agency (FHFA) says mortgage giants Fannie Mae and Freddie Mac will extend a moratorium on foreclosures until at least Aug. 31.
FHFA’s original foreclosure moratorium, announced in March, was set to expire June 30. The reprieve applies only to single-family loans owned by Fannie Mae and Freddie Mac. “During this national health emergency no one should worry about losing their home,” FHFA Director Mark Calabria said in a statement.
The Federal Housing Administration made an identical announcement about FHA mortgages, a type of loan that appeals to buyers with spotty credit or little savings for down payments. It, too, is extending a ban on foreclosures from June 30 to Aug. 31.
“While the economic recovery is already underway, many American families still need more time and assistance to regain their financial footing,” Housing Secretary Ben Carson said in a statement. Many states also have extended foreclosure relief periods, although they have less power over your mortgage than FHFA and FHA, which together hold most of the nation’s home loans.
What to do if you’re struggling to pay the mortgage
If you’re unable to pay your mortgage, the halts on foreclosures give some breathing room. But the more important mortgage relief comes in the form of mortgage forbearance programs offered by FHFA and FHA. These initiatives let homeowners pause their mortgage payments while dealing with a short-term crisis. In the case of coronavirus-related forbearance requests, most lenders are not requiring proof of hardship outside of verbal or written verification from the borrower.
Depending on whether you have a government-backed or privately owned mortgage, your forbearance options might differ. Before you apply for forbearance, find out from your lender which type of loan you have.
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