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Additional COVID-19 recovery options have been announced by the FHA to help forward and reverse homeowners who are facing hardships due to the pandemic.
FHA’s simplified COVID-19 Recovery waterfall allows servicers to offer homeowners who are unable to resume making their mortgage payments a reduction in the principal and interest portion of their monthly payments.
These changes will provide support to lower-income individuals, families of color, and young, first-time homeowners who have badly suffered economic hardships during this time.
For homeowners who are now able to make their monthly mortgage payments, the FHA has set a revised COVID-19 Recovery Standalone Partial Claim.
FHA is also reinforcing President Biden’s American Rescue Plan Homeowner Assistance Funds (HAF), administered to the States by the Department of Treasury, to be used for FHA-insured mortgages or subordinate mortgages as allowed by the jurisdiction’s HAF program and other requirements.
Housing and Urban Development Secretary Marcia L. Fudge said that President Biden prioritized the nation’s public health and economic crises with the American Rescue Plan.
When the economy recovers and people get back to work HUD is taking steps to make sure homeowners impacted financially by COVID-19 have the support they need to remain in their homes.
The new COVID-19 recovery waterfall comprises a COVID-19 Recovery Standalone Partial Claim.
This COVID-19 Recovery Standalone Partial Claim allows arrears of mortgage payment to be placed in a zero-interest subordinate lien against the property to be repaid when the mortgage terminates.
The term of the mortgage is extended to 360 months at a fixed rate and targets by the COVID-19 Recovery Modification, reducing the borrower’s monthly principal and interest portion of the payment.
If the homeowner has Partial Claim funds available then the COVID-19 Recovery Modification must include a Partial Claim.
Just by contacting their servicer, the homeowners can obtain a mortgage payment forbearance or a HECM extension.
For FHA forward mortgages, homeowners are requested to look out for communications from their mortgage servicer in regards to the new COVID-19 ALM or how to work with their mortgage.
Reference Source: National Mortgage Professional
