Homeowners with mortgages backed by Fannie Mae or Freddie Mac are eligible for a two-month extension to avoid foreclosure if they apply to the Homeowner Assistance Fund, according to an announcement on April 6, 2022, by the Federal Housing Finance Agency.
Mortgage servicers will have to suspend foreclosure activities for up to 60 days for eligible homeowners. Assistance can also come in the form of lower mortgage payments and paying utility bills.
“FHFA is committed to sustainable homeownership. Today’s action will provide borrowers who need temporary mortgage assistance with additional time to be evaluated for relief through their state’s approved Homeownership Assistance Fund,” said FHFA Acting Director Sandra L. Thompson.
As of December 31st, there were 178,019 mortgages in forbearance, down from 320,009 in the third quarter, according to an FHFA spokesman, Adam Russel.
Out of the leading states with these mortgages in forbearance, California and Texas ranked number one and three with more than 20,000 and nearly 17,000 mortgages, respectively.
The Homeowner Assistance Fund was created by the CARES Act and is administered by the Treasury Department, provides up to $10 billion to help struggling American homeowners.
Who qualifies for the Homeowner Assistance Fund extension?
To qualify for this two-month extension, homeowners must apply for assistance from the Homeowner Assistance Fund (HAF). The fund covers homeowners who are behind on their mortgage payments due to COVID-19 and don’t have an alternative source of assistance.
Eligible applicants must meet these criteria:
* The homeowner either had a financial hardship caused directly by COVID-19, or they have experienced financial difficulty due to COVID-19 that makes it hard to pay their mortgage.
* They must have a mortgage backed by Fannie Mae or Freddie Mac. To find out if that’s you, go to Fannie Mae’s Lookup Tool or Freddie Mac’s Loan Lookup Tool. Or contact your mortgage servicer directly.
* The original loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2021. Although the loans can be delinquent, they cannot be in foreclosure at least 90 days before applying for HAFA.
* Not already be behind on payments at the time of application.
* Be part of a household with income 80% below the area median income in the location of their property, but only if that amount is no more than $100,000 annually.
* Not have an interest in another residential property at the time they apply for assistance.
The foreclosure moratorium expired on July 31, 2021. However, some states and local governments have temporarily stopped foreclosures.
Homeowners who need mortgage help can visit consumerfinance.gov/housing for up-to-date information on their relief options, protections, and key deadlines.
Moe Bedard is the founder and lead mortgage analyst for LoanSafe.org. Since 2007, LoanSafe has helped over 2 million consumers with solutions to their mortgage problems and has been featured in the New York Times, LA Times, Fox Business, and many other media publications.