Mortgage Relief Programs are Here
Homeowners who are having a hard time keeping up with their mortgage payments will be happy to learn about these mortgage relief programs provided by the government.
Many of these mortgage relief programs were passed to try and help homeowners who were struggling to make payments because of the coronavirus pandemic. However, every American is now eligible to take advantage of these mortgage relief programs even if you have little or no equity in your home.
The US government recently announced that it was extending the forbearance and foreclosure relief programs. This means that if you have a government backed mortgage you will be eligible for the forbearances and protections from foreclosure. This applies to roughly 70% of mortgages in the United States.
Freddie Mac Forbearance
If you are a Freddie Mac borrower you can qualify for 12 months of forbearance. This will give you relief for an entire year after which point you will return to your regularly scheduled mortgage payments. One added benefit of this is that the fact you go for one year without making your full mortgage payments will not be reported to the credit bureaus.
Fannie Mae Forbearance
If you are a Fannie Mae borrower you could get 12 months of forbearance or even suspended mortgage payments. Just like with Freddie Mac, the fact you are in forbearance will not be reported to any of the credit agencies.
With both the Freddie Mac and Fannie Mae options you might also be eligible for the Covid-19 payment deferral. This means that the amount of forbearance does not need to be paid back at the end of the forbearance period, but instead can be paid back at the end of your mortgage term.
Home Affordable Unemployment Program
The Home Affordable Unemployment Program is designed to assist homeowners who have lost their jobs. This program reduces or lowers mortgage payments for 12 months of more. In order to qualify for this program you must owe less than $729,750 on your mortgage and be living at your home. The program will lower your mortgage payments to be no more than 31% of your income. If you have no income whatsoever the mortgage payments can be suspended for one year.
Principal Reduction Alternative
The Principal Reduction Alternative is a little known mortgage relief program that is designed to encourage mortgage lenders to reduce how much you own on your house.
People who received their first mortgage before 2009 and whose monthly payment is more than 31% of their income can apply for the Principal Reduction Alternative. In general, you must prove that you have encountered some form of financial hardship in order to qualify.
Second Lien Modification Program
The Second Lien Modification Program is designed to help people with a second mortgage on their home. Note that only homes who took advantage of the Home Affordable Modification Program and have not missed 3 or more payments are able to receive this benefit program.
VA Loan Forbearance
Anybody who is a US Military veteran is able to apply for VA mortgage forbearance through the Department of Veterans Affairs. All VA borrowers are eligible for a 6 month forbearance period which can be extended for an additional 6 months if you still need mortgage support.
Another benefit for anybody who has a VA loan is that the Department of Veterans Affairs has publicly stated that they will not be doing any evictions or foreclosures while the pandemic is still going on. The goal is to help veterans get back on the feet, find employment and restart making their mortgage payments once the forbearance period is over.
There are a number of mortgage relief programs that are currently available from federal and state governments. Anybody who is experiencing financial difficulty should investigate these programs in detail to see what they are eligible to claim.
Programs exist that allow homeowners to suspend mortgage payments for up to 12 months and then resume payments once they are in a better financial situation. There are other programs that can reduce the amount of principal that you owe on your mortgage which will mean lower monthly payments.
It only takes a few minutes to apply for these programs online, so you have nothing to lose by filling out an application and seeing if your home is eligible. You might be surprised by how much you can save on your monthly mortgage payments.