Is national debt relief program or federal mortgage relief program familiar to you? Did the COVID-19 pandemic affect you financially, just like many others? If so, then it is likely that you have concerns about how to pay your rent or mortgage. The good news is that both federal and state governments announced plans in order to help struggling homeowners and renters during this tough time. Through mortgage relief programs.
COVID-19 Debt Relief Programs for Homeowners and Renters
It is worth noting that bank regulators and federal housing agencies in the country have recently issued detailed guidance to provide flexibility and convenience to borrowers and renters who are facing hardships with upcoming payments on their mortgage because of the coronavirus. Keep in mind that this flexibility helps homeowners, renters, and landlords or anybody who requires some type of partial deferment on their debt payment or rent due to income losses because of COVID-19.
For example, you might be able to suspend your mortgage payments without penalty for up to 180 days. You can also qualify for eviction and foreclosure protection during this time. In addition, certain renters are safe from eviction in case they cannot pay their rent due to the pandemic.
(READ: What Happens After You Pay Off Your Mortgage?)
Federal Mortgage Relief
If you are an individual with a federally backed mortgage loan and are experiencing financial difficulties because of COVID-19, you can easily request a forbearance period. All you have to do is contact your mortgage servicer. The CARES Act provides an extension on this protection. Federally-backed mortgage assistance in the US includes VA, FHA, USDA, Freddie Mac, and Fannie Mae.
Forbearance is excellent as it allows you to temporarily reduce or stop your mortgage payments during a time of financial difficulty, such as a recession or pandemic. You will have to pay the difference at a later date. Remember that under the FHFA’s COVID-19 relief plan, your mortgage servicer has to work with you in order to come up with a mortgage modification by the date your forbearance period is over. This will allow you to afford your new monthly payments.
The FHFA is offering payment forbearance to mortgage borrowers adversely impacted by COVID-19 for up to one year due to financial hardship. And the great thing is that lenders are waiving late fees and penalties as well. Because of the CARES Act, it is even simpler for struggling homeowners in the US to get this relief. As a homeowner, you do not need to prove that you are in financial distress to get mortgage relief. And this means there is no need to produce extensive documentation.
COVID-19 Relief for Renters
Although many states and counties in the US have made a move to prohibit or limit evictions temporarily, right now, there is not any rent freeze policy at the state or federal level. Keep in mind that the CARES Act protects you if you live in various types of public housing. The act provides a temporary moratorium on evictions, and late fees, for any failure to pay rent for 120 days starting March 27, 2020.
Still, remember that some renters might be able to get indirect relief through Fannie Mae and Freddie Mac. For example, landlords who are owners of multi-family homes in the US, bought with mortgages backed by these financing organizations, receive forbearance. The condition for this type of mortgage relief plan is that they immediately cease evictions for tenants who are not able to pay rent because of financial hardship triggered by the coronavirus.
