People worried about paying their mortgages during the pandemic will get an extended reprieve from the government. The Federal Housing Finance Agency announced last week that Fannie Mae and Freddie Mac will extend their moratorium on foreclosures and evictions until “at least” August 31.
The relief period created by the CARES Act was set to expire on June 30. The extension, along with the original relief period, applies to government-backed mortgages, those from Fannie and Freddie, the Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA), the U.S. Department of Housing Development (HUD) or the U.S. Department of Agriculture (USDA).
(If you’re not sure, the CFPB has a guide for figuring out who owns your mortgage.)
The change reflects the reality of economic recovery during and after the coronavirus pandemic. “Many industries were shut down for months and will take time to recover, leaving workers and business owners suffering financially,” said Beatrice de Jong, trends expert at Opendoor, said. Extending the moratorium acknowledges that housing is one of the highest expenses people face each month, and can relieve some of then anxiety you might feel about keeping your home.
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If you’re having trouble making mortgage payments, the original opportunity to put your federally backed mortgage in forbearance still applies: You can request a 180-day forbearance period and later request a 180-day extension on the back of that.
Your lender isn’t allowed to charge you any extra fees or penalties for delaying your payments or making arrangements for you to pay back that deferred balance later. You also don’t need to provide any documentation to prove your financial hardship.
If your mortgage isn’t federally backed, you may still be able to get your payments deferred by contacting your lender.
The extension may also provide a sense of security for renters, who may have access to their own accommodations regarding payments. “Many landlords operate as a small business and can’t afford to lose tenant payments without the risk of losing the property,” de Jong said. By taking some pressure off landlords, renters may feel less pressure from them to pay on time and in full.
