The extensions are a coordinated effort with the Department of Housing and Urban Development (HUD), the Department of Veterans Affairs, and the Department of Agriculture and will apply to property owners with mortgage loans guaranteed by these agencies. Those with Fannie Mae (OTCMKTS: FNMA) and Freddie Mac (OTCMKTS: FMCC)-backed mortgages are covered under the Federal Housing Finance Agency's recent extensions.
Here's what today's announcements actually mean for property owners: First, if you have a USDA-, FHA-, or VA-backed mortgage loan, you can now apply for forbearance through June 30, 2021. This was previously set to March 31.
You can also maintain your forbearance longer. Initially, borrowers could have up to 360 days of forbearance, pausing their mortgage payments for nearly a full year. Today's announcement extends that timeline, allowing property owners who entered forbearance on or before June 30, 2020, an additional six months of forbearance, split into three-month increments. In total, borrowers can now pause payments for 18 months total.
Finally, today's move also extends the foreclosure ban on government-backed properties. Servicers cannot initiate foreclosures on these homes until after July 1 at the earliest. This was previously set to expire at the end of March as well.
The White House statement says: "Today's actions directly benefit the 2.7 million homeowners currently in COVID forbearance and extend the availability of forbearance options for nearly 11 million government-backed mortgages nationwide. Communities large and small need this assistance."