The Biden Administration has extended the foreclosure moratorium and the mortgage forbearance deadline for borrowers who have USDA loans.
The announcement will directly apply to loan holders in the USDA Single Family Housing Direct and Guaranteed loans programs.
A recent Census Bureau survey showed that 8.2 million homeowners are currently behind on mortgage payments, and of that 8.2 million, 3 million homeowners behind on payments were Black or Hispanic, the USDA said in the announcement of the extension.
The extension will run through June 30, 2021.
“USDA recognizes that the COVID-19 pandemic has triggered an almost unprecedented housing affordability crisis in the United States. That’s why USDA is taking this important action today to extend relief to the hundreds-of-thousands of individuals and families holding USDA Single Family Housing loans,” USDA Deputy Under Secretary for Rural Development Justin Maxson said. “While today’s actions are an important step for them, we need to do more. The Biden Administration is working closely with Congress to pass the American Rescue Plan to take more robust and aggressive actions to bring additional relief to American families and individuals impacted by the pandemic.”
Foreclosure Moratorium Extension
The actions announced today make it possible for the foreclosure and eviction moratorium announced by USDA, Single Family Housing Direct Loan Program (SFHDLP) and the Single Family Housing Guaranteed Loan Program (SFHGLP) on Jan. 20, 2021, to be extended until June 30, 2021. The moratorium does not apply in cases where USDA or the servicing lender has documented the property is vacant or abandoned.
Lenders may continue to provide impacted borrowers relief by offering forbearance of the borrower guaranteed loan payment for up to 180 days. In addition, the initial forbearance period may be extended up to an additional 180 days at the borrower’s request. Lenders may approve the initial 180-day COVID-19 forbearance no later than June 30, 2021. SFHGLP borrowers that received a COVID-19 forbearance prior to June 30, 2020, may be granted up to two additional three-month payment forbearances. Lenders should outline potential solutions that may be available at the end of the forbearance period and explain to borrowers that a lump sum payment of the arrearage will not be required.
During the forbearance options outlined above, no accrual of fees, penalties or interest should be charged to the borrower beyond the amounts calculated as if the borrower had made all contractual payments in a timely fashion.