FHA Mortgages

FHA Extends Mortgage Forbearance Choices

FHA Expands Mortgage Forbearance Options

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FHA Expands Mortgage Forbearance Options

Borrowers struggling to make their FHA mortgage payments now have more time to request forbearance.

According to the U.S. Department of Housing and Urban Development, you can apply for FHA loan deferral – essentially a temporary suspension of mortgage payments – from now until the end of the national COVID-19 emergency. Previously, the option (at least applied for) had expired on September 30th.

“Our top priority is helping as many individuals and families as possible recover from the COVID-19 pandemic and keep their homes,” said Lopa Kolluri, assistant assistant secretary for housing. “For the FHA, this means we will continue to work across all of our channels – mortgage servants, housing consultants, and our other federal partners – to ensure we get the positive outcomes that homeowners have in trouble.”

Do you have an FHA-funded investment property? Are you struggling to keep track of payments due to tenant non-paying or other issues? Here’s what you need to know.


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FHA forbearance extensions

HUD’s latest move brings FHA forbearance options closer to those of Fannie Mae and Freddie Mac, who have no set expiration date for conventional borrowers.

To be clear, extending the HUD does not mean borrowers can suspend mortgage payments for as long as they need to. There are still length restrictions on FHA forbearance, but now borrowers can apply anytime. Before that, they could not apply for an injunction beyond September.

The exact deadlines for a borrower will depend on when their grace period begins. For those who apply on October 1 or later, they can have up to 12 months in total (six months for an initial deferral and another six month extension). Borrowers who have applied earlier may have up to 18 months in some cases.

HECM – or Home Equity Conversion Mortgage – forbearance options have also been expanded with HUD’s announcement this week. These borrowers can also request a deferral for up to 12 months until the end of the national COVID-19 emergency.

Other strategies to help

If you are a landlord who cannot pay your mortgage, a cease and desist motion is not your only option. Keep these tips in mind to cut your overheads or consider increasing your rents when you have tenants to renew. These strategies can also help you increase cash flow as you get back on your feet.

Finally, if you are really struggling, your best bet may be to speak to a home counselor or sell your property. In today’s hot market, there is a good chance your returns will be strong – especially if you bought the home a few years ago.

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