The Federal Housing Finance Agency (FHFA) has once again extended its COVID-19-related relief efforts.
This time, the changes come twofold: First, by drawing out mortgage forbearance options by at least three months, and second, by pushing back the foreclosure moratorium on GSE-backed properties through March 31.
For many property owners, the updates will come as a welcome surprise -- especially those who are struggling to pay their mortgage or dealing with nonpaying tenants in their rental property.
Do you fall into either camp? Just want to make sure your properties are safe during all the pandemic-fueled uncertainty? Here's what you need to know.
First up, there's the mortgage forbearance extension. This one builds on the forbearance options initially established through the CARES Act last year, which -- until now -- capped borrowers at 360 days of paused mortgage payments.
Now, that relief has stretched to 15 months. To apply, borrowers in forbearance simply need to call up their servicer, request the three-month extension, and enjoy the benefits.
The second change pertains to single-family foreclosures. Previously, the FHA halted foreclosures on all Fannie Mae (OTCMKTS: FNMA) and Freddie Mac (OTCMKTS: FMCC)-backed properties until Feb. 28. Today, the agency extended the ban until the end of March.
According to an announcement from the FHFA, the extensions will cost the GSEs upwards of $1.5 billion.
What it means for you
If you've lost income due to the pandemic, are having a hard time paying the bills, or just have a nonpaying tenant you can't evict (hello, eviction bans!), the FHFA's extensions could be just the relief you're looking for.
They could mean:
- A break on monthly payments: Having a hard time making paying the mortgage on your properties? You now have a little more time to sort out your finances. If you're already on a forbearance plan, you'll get three more months. If you haven't filed for forbearance yet, you'll get a whopping 15-month break when you do. (The deadline to apply is Feb. 28, though, so get moving fast.)
- More cash flow: If your tenants aren't paying up or your finances are just otherwise strapped for cash, the mortgage forbearance extension could help. Just pause your mortgage payments for an additional three months, and use the extra cash flow to get back on track.
- A safe property: If things get rough and you're unable to make your mortgage payments, today's news means foreclosure is off the table. You have at least six weeks to settle up, file for forbearance, or sell the property to avoid further action (if the agency doesn't extend the ban further).
Keep in mind that only GSE-backed properties are eligible -- meaning homes financed with a Fannie Mae- or Freddie Mac-owned loan. You can use Fannie and Freddie's lookup tools if you're not sure your property qualifies.