FHA Gives Extra COVID-19 Forbearance and HECM Extensions, Proposes New COVID-Associated Modification Coverage | Weiner Brodsky Kider PC
On September 27, 2021, the Federal Housing Administration (FHA) announced additional COVID-19 relief for borrowers. In the Mortgagee Letter (ML) 2021-24, the FHA issued a new forbearance relief, granting borrowers up to six months of deferral for those who made their first such COVID-19 omission between October 1, 2021 and the end of the national COVID- 19-apply in an emergency. Borrowers can get an additional six months if the forbearance is exhausted or before the end of the national COVID-19 emergency. This provision is intended to help borrowers newly financially affected by the COVID-19 pandemic, especially the delta variant.
The new extension grants borrowers who were born between July 1, 2021 and December 30, 2021.
FHA also offers the option for additional periods of COVID-19 Home Equity Conversion Mortgage Extensions (HECM) when the first application is made on October 1, 2021, until the end of the national COVID-19 emergency and when the first COVID-19 -HECM The extension request was made between July 1, 2021 and September 30, 2021.
FHA also proposed a future addition to a 40-year loan modification policy for COVID-19 recovery options in a separate announcement. The proposed addition is being considered for inclusion in FHA’s COVID-19 Recovery Loss Mitigation Options. The 40-year loan modification is designed to help certain borrowers achieve the targeted 25 percent reduction in the monthly principal and interest portion of their mortgage payments. The FHA encourages interested stakeholders to thoroughly review and provide feedback on the proposed amendment between September 27, 2021 and October 27, 2021.