Homeowners struggling amid the coronavirus pandemic received some welcome news Tuesday, with the Biden administration announcing it will extend forbearance and foreclosure relief programs.
The White House said that the move will benefit the 2.7 million homeowners currently in Covid forbearance and extend the availability of forbearance options for around 11 million other government-backed mortgages nationwide.
“Since the crisis is going on much longer than anyone anticipated, it’s only appropriate to extend remedies that we know are working,” said Sarah Gerecke, an associate professor of planning at New York University. Many of those relief options were scheduled to expire next month.
Have questions about the new protections? Here are some answers.
Federally backed mortgages, or about 70% of borrowers, are eligible for the additional forbearances and protections from foreclosure.
Specifically, if you have a home loan through the Federal Housing Administration, the U.S. Department of Agriculture or the U.S. Department of Veterans Affairs, you can enroll in a forbearance until June 30. If you have a mortgage from Fannie Mae or Freddie Mac, you can also delay your payments.
“The easiest way to find out if you are eligible and to seek payment relief if you need it is to reach out to your lender,” said Greg McBride, chief financial analyst at Bankrate.com.
Unsure of who your lender is? The Consumer Financial Protection Bureau has a guide to figuring that out.
Some people may be in forbearance for as long as 18 months, since the first stimulus package passed in March, the CARES Act, offered homeowners two 180-day relief periods, and now the Biden administration is granting them two additional three-month breaks.
The rules vary, however, depending on what kind of government-backed loan you have.
If your mortgage is from Fannie Mae or Freddie Mac, you can delay your payments for up to 15 months. But you’ll have to enroll with your lender by the end of February, said Alys Cohen, an attorney at the National Consumer Law Center.
If your home loan is through the Federal Housing Administration, the U.S. Department of Agriculture or the U.S. Department of Veterans Affairs, you’re allowed to delay your payments for 18 months, as long as you do so by the end of June.