If you’re having trouble making your rent or mortgage payment due to the economic upheaval caused by the COVID-19 pandemic, you’re not alone. Millions of Americans have lost their jobs, been furloughed, had their hours reduced or have had to take time off work due to illness or to care for a family member — with or without pay.
The good news? There’s help for both renters and homeowners. Unfortunately, many don’t know about the assistance available to them.
“As we confront these unsettling times, it is important to help keep people in their homes,” said Malloy Evans, Senior Vice President at Fannie Mae, the government sponsored enterprise that finances about one in every four homes in the U.S. “It is important to provide homeowners and renters with the information they need to take advantage of the housing payment relief options that are available.”
To raise awareness of housing assistance options, Fannie Mae created “Here to Help,” an online portal offering resources and tools with clear information on what people should do if they are worried about paying their mortgage or rent during this challenging time.
If you’re having trouble making your mortgage payments due to COVID-19, and if your mortgage is backed by a government sponsored enterprise, such as Fannie Mae, you are entitled to a temporary postponement of your mortgage payments, called “forbearance.” Forbearance does not erase the amount you owe, but it allows for reduction or suspension of your mortgage payments for up to 12 months. You will not be charged late fees during forbearance as long as you stick to the plan’s agreed terms.
To request forbearance or other mortgage assistance, contact your mortgage servicer — the company that manages your monthly mortgage payments.
While you will eventually have to make up the payments you missed during your forbearance plan, you are never required to pay it back all at once unless you are able to do so. Other options include a repayment plan, which allows you to gradually catch up on the missed amount over a period of time, or payment deferral, which keeps your monthly payments the same by moving the missed amount to the end of the loan term with no additional interest. If you have experienced a permanent impact to your ability to make your current mortgage payment, you may qualify for a loan modification, which could reduce your monthly payment by extending your loan over a longer period of time.
If you currently rent and need help managing your payments, your first step should be talking to your landlord or property manager about available options. Be sure to keep all mail, e-mail or text correspondence with your landlord and make detailed, dated notes of any conversations you have in person or over the phone. Ask about payment arrangements, such as a temporary rent reduction. Remember these may be stressful financial times for your landlord, too. Try to communicate the facts about your situation clearly and calmly.
The owners of multifamily rental properties financed by Fannie Mae or other government-backed financing can seek forbearance and extended repayment plans to help deal with COVID-19 impacts. For renters in those properties, there are a number of additional protections: You cannot be served with an eviction notice solely for nonpayment of rent and you cannot be charged late fees or penalties. You will still need to pay the rent that is owed, but your landlord must give you flexibility to repay over time.
Navigating broader financial challenges
Importantly, homeowners with a Fannie Mae-financed mortgage and renters in a Fannie Mae-financed multifamily property (5+ units) qualify for free access to housing counseling approved by the U.S. Department of Housing and Urban Development (HUD). The counselors provide free personalized assistance to help you navigate broader financial challenges you may be facing so you can return to normal faster.