You Can Now Request COVID-Related Mortgage Forbearance for Up to 15 Months

Posted on February 10th, 2021

Some good news for homeowners struggling to make ends meet thanks to COVID-19, which as the name implies has been going on for a while now.

The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, has just announced an extension to the COVID forbearance period, which was previously capped at 360 days.

Now borrowers who requested mortgage forbearance back in March or April of 2020 will be able to get another few months to keep monthly payments on hold.

COVID-Related Mortgage Forbearance Extended Another 3 Months

  • Homeowners with a Fannie/Freddie-backed mortgage can now request an additional three months of forbearance
  • Originally allowed for an initial 180 days of payment relief (and an additional 180 days if the borrower needed more time)
  • Now borrowers can get a full 15 months of mortgage payment relief if in a COVID-19 forbearance plan
  • Applies to those who are in a COVID-19 forbearance plan as of February 28th, 2021

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) originally allowed homeowners with a federally-backed residential home loan to request forbearance for up to 180 days, or roughly six months.

It also included a 180-day extension if they were still struggling to make mortgage payments at the end of the original 180-day term.

Now the FHFA has gone step further by allowing an additional three months of relief, for a grand total of 15 months of suspended mortgage payments.

In other words, a homeowner who is unable to pay their mortgage due to COVID-19 can now set aside payments for a whopping 540 days.

While it might sound excessive, it’s a sign of the lasting economic effects of COVID, which is now into its third year with no clear sign of slowing.

All 15 Months of Missed Mortgage Payments Can Be Deferred

  • Homeowners who request all 15 months can also set aside the full amount to repay later
  • The COVID-19 Payment Deferral option has been adjusted to cover up to 15 months of missed payments
  • The missed payments are not due until the home is sold, the mortgage refinanced, or when the loan matures
  • This should make it easier for those struggling with a COVID-19 income disruption to remain in their homes

In line with the three-month extension, the FHFA noted that it will also allow borrowers to defer the full 15 months of mortgage payments via the COVID-19 Payment Deferral option.

This means they won’t need to repay any of that sum until the underlying property is sold, the mortgage is refinanced, or when the home loan matures.

Do keep in mind that there is a three-month waiting period to get a mortgage after forbearance ends.

So if you request another extension, you’ll have to wait that little bit longer to get a subsequent mortgage backed by Fannie Mae or Freddie Mac.

The FHFA also extended the moratoriums on single-family foreclosures and real estate owned (REO) evictions until March 31st, 2021.

Previously, they were set to expire on February 28th, 2021. The foreclosure moratorium applies to Fannie- or Freddie-backed, single-family mortgages only.

And the REO eviction moratorium applies to properties acquired by Fannie or Freddie via foreclosure or deed-in-lieu of foreclosure transactions.

The only lingering question now is the deadline to apply for mortgage forbearance.

While you can apply until March 31st, 2021 if you have an FHA loan, USDA loan, or VA loan, those with Fannie and Freddie loans currently only have until the end of this month.

Whether that date gets extended remains to be seen, but my guess is they’ll push that date out as well. Still, if you need help, you probably don’t want to waste time in case they don’t.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for nearly 15 years.