Homeowners can now defer mortgage payments for an extra 6 months—here’s how to tell if you're covered

President Joe Biden directed federal housing regulators to extend mortgage forbearance programs for an additional six months and prolong foreclosure relief programs on Tuesday in a move that will cover an estimated 70% of mortgages for single-family homes in the U.S.

As the latest Covid-19 relief package continues to make its way through the Congressional legislative process, Biden ordered the Department of Housing and Urban Development, Department of Veterans Affairs and Department of Agriculture to extend their foreclosure moratoriums and forbearance programs.

Specifically, the regulators are set to: 

  • Extend the ban on foreclosures through June 2021.
  • Allow homeowners to enroll in mortgage payment forbearance programs through June 2021.
  • Extend forbearance programs for an additional six months for those who already entered a mortgage payment program before June 30, 2020. Homeowners will need to request the extension every three months.

"As President Biden has made clear, it is urgent that we help homeowners throughout the nation who are struggling financially from this unprecedented national emergency," Matthew Ammon, acting HUD secretary, said in a statement. "The steps we are taking today will provide both immediate relief to those in desperate need of assistance and help more homeowners keep their homes and resume their payments when the pandemic subsides."

In addition to the directives Biden issued Tuesday, Fannie Mae and Freddie Mac made the move last week to extend their forbearance and foreclosure programs. The new terms halt single-family foreclosures and real estate owned (REO) evictions until March. 

Those with Fannie Mae and Freddie Mac mortgages who are enrolled in a Covid-19 forbearance program as of February will also get an additional three months of mortgage payment deferral, according to the Federal Housing Finance Agency. This means those with these federally-backed mortgages can now defer their payments for up to 15 months.

For federal mortgages, loans made by the following agencies are eligible for relief: 

  • Federal Housing Administration
  • Department of Housing and Urban Development
  • Department of Agriculture
  • Department of Veterans Affairs
  • Freddie Mac
  • Fannie Mae

If you're unsure who owns your loan, Fannie Mae and Freddie Mac offer loan lookup tools that can help you quickly determine if either of these major lenders owns your loan. You can also always ask your servicer or look at your loan documents.

Additionally, the Consumer Financial Protection Bureau offers a Find a Counselor tool, which provides a list of counseling agencies that can help advise on loan terms, credit issues and foreclosure. 

Initially, the CARES Act provided for about a year of mortgage payment deferral for homeowners with federally backed loans. While that seemed sufficient at the time, the pandemic and its economic fallout is dragging on far longer than had been expected, Bankrate.com's chief financial analyst Greg McBride says.

"Extending the forbearance available on federally backed mortgages is a critically important move to preserve homeownership for millions of households that have seen income disruption or outright job loss due to the pandemic," McBride said in a statement Tuesday.

Mortgages owned by private lenders, such as banks, are not included in this relief. Biden's proposed relief package would also create a $10 billion Homeowners Assistance Fund that would allow states to help all homeowners with mortgage payments and utility costs. 

About 2.7 million homeowners are currently in some type of forbearance plan, according to the latest estimate from the Mortgage Bankers Association. Of those, a majority are mortgages held by private lending services, as opposed to federal loans.

Check out: 26% of Americans have taken advantage of some type of payment deferral plan

Don't miss: Here are the 5 best personal loans of December 2020

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