Biden Administration Declares New COVID-19 Aid Measures for FHA, VA and USDA Debtors | Ballard Spahr LLP
The Biden administration recently announced additional COVID-19 relief efforts for borrowers whose loans are insured or guaranteed by the Federal Housing Administration (FHA), the US Department of Veterans Affairs (VA), and the US Department of Agriculture (USDA). The action is designed to bring the options for such borrowers “closer to the options available to homeowners with Fannie Mae and Freddie Mac-backed mortgages”.
The US Department of Housing and Urban Development (HUD) addresses the relief measures in the Mortgagee Letter 2021-18. Measures now include the following harm mitigation options: COVID-19 Forbearance, COVID-19 Advance Loan Modification, COVID-19 Recovery Standalone Partial Claim, COVID-19 Recovery Modification, COVID-19 Recovery Non-Occupant Loan Modification, COVID-19 Pre -Sale of foreclosure and COVID-19 representation of foreclosure.
The VA addresses the relief efforts in Circular 26-21-13, with a graphical version of the Housing Preservation Waterfall set out in Appendix A of the Circular and a direct comparison of the partial payment for COVID-19 veteran aid and that in Appendix B. options to change the COVID-19 reimbursement.
The USDA addresses the relief efforts in a stakeholder notice and bulletin, the latter with a link to a pre-copy of Section 5 of Chapter 18 of Technical Manual-1-3555.
The measures see, among other things, a reduction in monthly principal and interest payments for borrowers from FHA borrowers by 25% or more, a reduction in monthly principal and interest payments from VA borrowers by 20% or more, and a reduction in monthly principal and interest payments Interest payment for USDA borrowers.