Biden administration announces extension of foreclosure moratorium and mortgage forbearance deadline that will bring relief to rural residents
WASHINGTON, January 20, 2021 – In one of his first acts in office, President Joe Biden called on federal agencies to extend moratoriums on deportations and seizures for millions of Americans. In response, the US Department of Agriculture announced an extension of the moratoriums on evictions and foreclosures on USDA Direct and Guaranteed Single-Family Housing Loans (SFHDLP and SFHGLP) until March 31, 2021. The actions announced today will bring relief to rural residents of America who have home loans through the USDA.
The USDA acknowledges that the COVID-19 pandemic has triggered an almost unprecedented housing affordability crisis in the United States. Today, 1 in 10 homeowners with a mortgage are in arrears. In addition to the actions taken, the Biden administration looks forward to working with Congress to take stronger and more aggressive action to bring further relief to families and people in America affected by the pandemic.
Visit www.rd.usda.gov/coronavirus for more information on the USDA COVID-19 Rural Development Relief Application Deadline Extensions and more. USDA Rural Development will keep our clients, partners and stakeholders informed on an ongoing basis as further steps are taken to bring relief and development to rural America.
Extension of the foreclosure moratorium:
Actions announced today enable the moratorium on foreclosures and evictions announced by the USDA, the Direct Loan Program for Single-Family Housing (SFHGLP) and the Guaranteed Loan Program for Single-Family Housing (SFHGLP) on August 28, 2020 to be extended until March 31. 2021. The moratorium does not apply in cases where the USDA or the lender of service has documented that the property is vacant or abandoned.
Lenders must continue to provide relief to affected borrowers in accordance with the CARES Act by offering withholding from payment of the borrower guaranteed loan for up to 180 days. In addition, the initial forbearance period can be extended up to a further 180 days at the borrower’s request. Lenders should describe potential solutions that may be available upon completion of the forbearance payment and explain to borrowers that a lump sum payment of the arrears will not be required.
During the forbearance options described above, no accumulation of fees, penalties or interest can be charged to the borrower beyond the amounts calculated as if the borrower had made all contractual payments on a timely basis.
Lenders can approve the initial 180-day COVID-19 forbearance no later than the end date of the national emergency declared by the President on March 13, 2020 or March 31, 2021.
At the end of the forbearance, the lender will work with the borrower to determine if they can resume their regular payments and, if so, come up with an affordable repayment plan or term extension to defer any missed payments back to the bank. end of loan. If the borrower is unable to resume regular payments, the lender should assess the borrower for all available loss mitigation options outlined in HB-1-3555. The measured special relief that is described in section 5 of chapter 18 “Assistance in the event of natural disasters” will apply. These options include term extensions, compounding, and term extensions, as well as a mortgage payback advance.
Questions regarding program policy and this announcement can be directed to the National Office Division at [email protected] or (202) 720-1452.
USDA Rural Development provides loans and grants to help expand economic opportunities and create jobs in rural areas. This aid supports the improvement of infrastructure; Business development; housing; community facilities such as schools, public safety and health care; and high-speed Internet access in rural areas. For more information, visit www.rd.usda.gov.