It is easy to suddenly find yourself in need of mortgage help. All sorts of financial stressors can make you start looking for mortgage assistance. For example, you might have unexpected medical bills you have to pay. Unexpected job insecurity, such as that suffered by many citizens due to the COVID-19 outbreak, might also make it hard for you to meet your mortgage obligations without help.
Fortunately, there are several government programs that can help you pay your mortgage. For example, you may be able to request a forbearance to potentially put your mortgage payments on hold or get another form of home debt relief. Here are some helpful tips to help you explore mortgage relief programs.
Congress passed a mortgage relief program in 2020 in conjunction with the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The establishment of CARES Act mortgage relief was in response to the hard-hitting nature of COVID-19.
The pandemic had many adverse effects on all aspects of modern life, including job losses. As a result, many homeowners across the country suddenly found it difficult or impossible to meet the financial obligations of owning their homes.
Another name for CARES is the Homeowner Relief Program. Under it, homeowners are allowed to delay mortgage payments temporarily through forbearance. The difference between forbearance and mortgage forgiveness is important to understand. Mortgage forgiveness eliminates debt completely, while forbearance only prevents penalties for non-payment on a temporary basis.
The purpose of mortgage forbearance is to give you much-needed temporary mortgage relief. It can help you focus on meeting other day-to-day financial obligations, like bills and other essential expenses.
This type of mortgage assistance is only available to citizens who are directly impacted by the COVID-19 pandemic. Also, only homeowners with mortgages insured by government agencies can qualify for the program. Those agencies include the following:
- Department of Veterans Affairs (VA)
- U.S. Department of Agriculture (USDA)
- Federal Housing Administration (FHA)
- U.S. Department of Housing and Urban Development (HUD)
- Freddie Mac
- Fannie Mae
The United States has been in a state of national emergency since the onset of the COVID-19 pandemic. Since then, the CARES Act has been extended multiple times.
You can request mortgage forbearance due to financial hardship from COVID-19 through the CARES act as long as the national emergency remains in effect.
There is no way to know specifically when the emergency is going to end. Additionally, the specific deadlines for forbearance requests through the various agencies above may vary, even when the emergency ends. You can start the process by speaking to your mortgage lender.
Once you have requested forbearance, you must wait to see if you are approved. During the waiting period, you are obligated to continue paying your mortgage. If you do qualify for forbearance, pay attention to your forbearance period. It is likely to only provide a pause period of six months or less.
If you need mortgage relief for longer than six months, you must apply for extension applications with your lender. However, extensions are not guaranteed; your lender must assess many aspects of your mortgage and your personal situation to determine your extension eligibility (or lack thereof).