Knowing your options
The inability to pay your mortgage can be overwhelming and can lead to problems—even foreclosure. If you are facing such challenges, there are resources that may be available to you to provide relief.
What if I can’t pay my home mortgage?
If you have a loan or a mortgage with a bank or other lender and are having difficulty making your payments, call your bank/lender as soon as you can. They may have a short-term solution that can give you some immediate relief through forbearance. Forbearance is when a bank or other lender allows you to postpone loan payments, temporarily lower your payments, or extend the term of your loan. Forbearance is not automatic--you need to take action and request it. Your bank or lender may be able to give you the time you need to recover financially without damaging your credit.
As a result of COVID-19, millions of homeowners fell behind on their mortgages and other housing-related expenses. The Homeowner Assistance Fund (HAF) is a new federal program that can help eligible consumers catch up on overdue bills and remain in their homes.
A large majority of states are running this program through their state’s housing finance agency (HFA). States will administer a total of nearly $10 billion, subject to Treasury Department guidance available on the HAF program website. Many states have also implemented, or are considering, various mortgage relief options, so be sure to check your state’s government website for details.
If you are already in forbearance based on the CARES Act (Coronavirus Aid, Relief, and Economic Security Act of 2020) and are still having financial difficulty, you might be able to request or obtain an extension. But extensions are not automatic--you need to take action and request it.
- If your loan is owned by Fannie Mae or Freddie Mac, you may be eligible for two additional three-month forbearance extensions, with up to a maximum of 18 months of total forbearance. To be eligible, the loan must have been in an active forbearance plan as of February 28, 2021. Be sure to discuss any options with your loan servicer.
- If your loan is backed by the Department of Housing and Urban Development (HUD)/Federal Housing Administration (FHA), U.S. Department of Agriculture (USDA), or Veterans Administration (VA), and you requested a forbearance plan on or before June 30, 2020, you may be eligible for up to two additional three-month extensions of your plan, for up to a maximum of 18 months of total forbearance. Be sure to check with your loan servicer about the options available.
Even if your loan is not owned by Fannie Mae or Freddie Mac, or backed by a federal government program, your loan servicer may be able to offer mortgage relief options, so be sure to ask about any options.
FDIC Consumer News: Getting Beyond the Tough Times
FDIC Consumer News: Working Through Financial Difficulty
FDIC Explains Forbearance
Consumer Financial Protection Bureau (CFPB): Start a conversation about payment agreements
NeighborWorks America Mortgage Relief & Foreclosure