USDA Extends Eviction and Foreclosure Moratorium, and Offers Guidance on Mortgage Forbearance Deadline
PURPOSE
The purpose of this notice is to announce an extension of the moratorium on foreclosure and to extend the date by which a lender may approve a borrower’s request for an initial COVID-19 mortgage payment forbearance.
Extension on Foreclosures and Evictions through July 31, 2021
The U.S. Department of Agriculture (USDA) Rural Development is extending its moratorium on foreclosures through July 31, 2021 for Single Family Housing Guaranteed Loan Program (SFHGLP) borrowers. The moratorium does not apply in cases where the lender has documented the property to be vacant or abandoned. After the moratorium ends, no new foreclosure filings should occur until homeowners are reviewed for new options to reduce their payments and stay in their homes. USDA will release new COVID-19 SFHGLP loss mitigation guidance prior to the July 31, 2021 expiration date.
Extending COVID-19 New Forbearance Starts to September 30, 2021
USDA borrowers that have not taken advantage of forbearance to date may request a mortgage payment forbearance prior to September 30, 2021. Lenders are expected to grant payment forbearance based on a borrower’s attestation (verbal or written) to financial hardship caused by the COVID-19 emergency. The initial forbearance period may be up to 180 days and the borrower may request an extension of up to an additional 180 days.
Borrowers who received an initial COVID-19 forbearance before June 30, 2020, may be granted up to two additional three-month payment forbearances. The borrower must request each extension individually.
The term of the initial forbearance and any extension may be shortened at the borrower’s request.
Fees, penalties, or interest (beyond the amounts calculated as if the borrower had made all contractual payments in a timely fashion) should not accrue during the forbearance.
Upon completion of the forbearance the lender should communicate with the borrower and determine if they are able to resume making their pre-COVID 19 payments or if a payment reduction is warranted. When a payment reduction is warranted, the lender must evaluate the borrower for USDA COVID-19 loss mitigation options that are outlined in Chapter 18 of the Handbook-1-3555.
Questions regarding program policy and this guidance may be directed to the National Office Division at sfhglpServicing@usda.gov or (202) 720-1452.