HUD Clarifies CARES Act FHA Mortgage Relief

April 21, 2020

The FHA and HUD have issued further guidance clarifying certain aspects of the coronavirus mortgage relief options issued by the agency to help borrowers affected by the pandemic. It has issued guidance for multi-family loans as well as for single-family FHA mortgages. Why are the multi-family rules good for the single-family borrower to have a passing familiarity with?

The guidelines for multi-family FHA loans in need of COVID-19 mortgage relief are similar to those for single-family borrowers. Understanding the general approach your lender will take to FHA loans will help borrowers make more informed decision about their loans including when to apply for economic relief and what options to choose.

According to HUD, the agency is “implementing a standard forbearance protocol to reduce paperwork and streamline processing for multifamily borrowers, servicers, and lenders.” The mortgage relief guidelines are applicable “during the covered period of the CARES Act, which begins March 27, 2020 and continues until the earlier of the termination date of the national emergency declared by the President on March 13, 2020 or December 31, 2020.”

HUD states, “effective immediately, a multifamily borrower with a FHA insured mortgage loan that was current on its payments as of February 1, 2020, may submit an oral or written request for forbearance to the borrower’s servicer affirming that the multifamily borrower is experiencing a financial hardship during the COVID-19 emergency.”

Like single-family mortgages, FHA multi-family loan relief requires the borrower to contact the loan servicer to make arrangements for mortgage relief. 

You cannot get an automatic forbearance of mortgage payments, nor can you expect a loan forbearance if you have not contacted the lender to make arrangements if you let too many missed payments happen. Act as soon as possible for best results.

It’s true that the majority of the articles written and posted here have to do with FHA single family home loans, One Time Close construction loans, refinance loans, and rehab loans. But it’s good for consumers to understand that the same requirements for emergency mortgage relief apply to both consumers and those who have multi-family mortgages from the FHA.

What should FHA borrowers in single-family homes do to qualify for their own mortgage relief options? The same thing the agency encourages multi-family borrowers to do--contact the lender as soon as possible and preferably BEFORE there is a missed payment. Look at what HUD tells multifamily borrowers about their FHA COVID-19 relief options:

“Under the CARES Act, effective immediately, a multifamily borrower with a FHA insured mortgage loan that was current on its payments as of February 1, 2020, may submit an oral or written request for forbearance to the borrower’s servicer affirming that the multifamily borrower is experiencing a financial hardship during the COVID-19 emergency.” The emphasis in that paragraph is ours, and it’s a good indication of what YOU should do to claim your FHA mortgage relief.

Do not wait until you have missed a mortgage payment to contact your lender. Call the loan servicer as soon as possible to make arrangements and prevent your loan from slipping into default.

------------------------------

RELATED VIDEOS:
Learn How to Meet FHA Requirements
A Few Tips About Your Fixed Rate Mortgage
Your Proof of Ownership Is the Property Title