FHA Extends Help for Pandemic-Affected Homeowners

By Kerry Smith

FHA borrowers can still get help to avoid an eviction or foreclosure. FHA will also maintain temporary policy flexibilities for lenders and servicers.

WASHINGTON – The Federal Housing Administration (FHA) announced that it’s extending the foreclosure and eviction moratorium for single family FHA-insured mortgages for an additional two months. The deadline is now Feb. 28, 2021.

The FHA is also extended the deadline for single-family borrowers with FHA-insured mortgages to request an initial COVID-19 forbearance from their mortgage servicer until Feb. 28. A forbearance allow them to defer or reduce their mortgage payments for up to six months, with an additional six months possible.

In addition, FHA also extended a range of temporary provisions for lenders and servicers to allow them to continue doing FHA business despite social distancing considerations.

This is FHA’s fourth eviction and foreclosure moratorium extension. The moratorium prohibits servicers from initiating or proceeding with foreclosure and foreclosure-related eviction actions for FHA-insured single family forward and reverse mortgages, except for those secured by legally vacant and abandoned properties.

In addition, FHA requires mortgage servicers to provide up to six months of COVID-19 forbearance when a borrower requests it, and up to an additional six months of COVID-19 forbearance for borrowers who request an extension of the initial forbearance. Borrowers must engage with their servicer to obtain an initial COVID-19 forbearance, however – the lender is not obligated to do so – on or before the Feb. 28 deadline.

“COVID-19 has created hardships for millions of Americans. FHA will continue to assist borrowers who are struggling to regain their financial footing as a result of this pandemic. American homeowners should not be forced from their homes while they are seeking help,” says Assistant Secretary for Housing and Federal Housing Commissioner Dana Wade.

FHA also extended:

• The timeframe for providing an insurance endorsement on single-family mortgages in forbearance through March 31, 2021.

• Temporary re-verification of employment guidance and exterior-only appraisal inspection options through Feb. 28, 2021.

• Temporary provisions for verification of self-employment, rental income, and 203(k) Rehabilitation Mortgage escrow accounts through Feb. 28, 2021.

Borrowers with FHA-insured mortgages seeking additional information on available options can visit FHA’s COVID-19 Resources for Homeowners. All homeowners, including those without an FHA mortgage, can visit the Consumer Financial Protection Bureau’s Coronavirus Mortgage and Housing Assistance web page.

© 2020 Florida Realtors® Reprinted with Permission

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