Stimulus mortgage program: how to apply to pause mortgage payments

The Biden administration has extended the mortgage forbearance programme introduced last year, giving you until July to claim the covid-19 financial relief.

Stimulus mortgage program: how to apply to pause mortgage payments

In March 2020 former President Donald Trump passed the CARES Act, a $2.2 trillion financial relief package that aimed to provide federal support for those affected by the pandemic.

Included in the legislation was a new programme designed to help those struggling to make mortgage payments: forbearance. If you are temporarily unable to cover the cost of mortgage payments you can apply to pause or reduce your regular payments and face no additional financial penalties.

Forbearance does not completely erase your outstanding payments and you will still be expected to repay any payments that you miss, but it does offer much-needed respite during a tough time.

How to request mortgage forbearance

If you are unable to make your scheduled mortgage payments you will not be granted forbearance automatically and will instead need to apply for the support from your servicer. Your mortgage servicer is the company who granted you the mortgage and who you send payments too each month.

Simply contact your servicer using the telephone number on your statement and tell them that you are unable to cover the monthly payment because of covid-19 and advise them that you need help avoiding foreclosure.

If you have a government-backed mortgage from HUD/FHA, VA, USDA, Fannie Mae, or Freddie Mac they are required to then discuss relief options with you, but even other servicers are typically happy to provide the support on the basis that they will get any missed payments in future.

Once you have been granted forbearance you must continue to monitor your loan and ensure that you are able to restart making payments as soon as forbearance ends. For full details on how to request and plan forbearance, check out the Consumer Financial Protection Bureau’s Forbearance Help Page.

Biden agrees extension to mortgage forbearance programme

The CARES Act only provided one year of mortgage forbearance, meaning that the programme was due to expire in March 2021. However in February President Joe Biden announced that he was extending the pandemic housing assistance for an extra four months, meaning that homeowners were able to request forbearance support until July.

This means that anyone yet to apply for the programme has until 30 June 2021 to request the mortgage relief to take advantage of the scheme. The Biden administration claimed that the February extension will provide support for 2.7 million homeowners across the country, while 11 million recipients of government-backed mortgages will be eligible for the assistance if required.