Homeowners and renters have until the end of the year to find a solution.
The U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Authority (FHA) have announced that the foreclosure and eviction moratorium has now been extended through December 31, 2020. This bans landlords and lenders from starting actions to remove renters and homeowners from FHA-insured or Fannie Mae or Freddie Mac property due to nonpayment. This is a big relief for millions of Americans who were potentially facing the loss of their home during the COVID pandemic.
A third extension gives some homeowners and renters more breathing room
The original moratorium was issued in mid-March as COVID closures began. Then it was extended through June 30 and again through August 31. Though the moratorium was set to expire today, HUD and the FHA issued the announcement of this latest extension just before the deadline on August 27.
Now homeowners and renters in qualifying properties have until the end of the year to find workable solutions to avoid losing their homes. The four-month extension will hopefully give households time to solve employment and income loss challenges caused by the pandemic. However, while the job market is showing signs of improvement, unemployment still sits at 10.2%. Many families are continuing to face challenges in their recovery.
“As welcome as this new extension is, homeowners and renters don’t have time to wait around,” explains Maria Gaitan, Director of Housing for Consolidated Credit. “It’s vital that you start working with a local HUD-certified housing counselor to understand options that may be available to save your home.”
Who qualifies for the foreclosure and eviction ban?
It’s important to note that the ban does not apply to every property. It only applies to properties that are either FHA-insured or Fannie Mae and Freddie Mac properties.
If you are a renter living in an FHA-insured single-family property, then you cannot be evicted from that property. Landlords can evict anyone living in a vacant or abandoned property. Renters can check if they live in a qualifying property through two websites:
For homeowners, the Federal Housing Finance Agency (FHFA) also extended the ban on foreclosure or deed-in-lieu of foreclosure transactions through the end of the year.
Finding state and local relief programs
In addition to the national foreclosure and eviction moratorium, many states and municipalities have enacted their own protections and relief programs. Homeowners and renters may have additional protections or relief opportunities available to them. Even those who may not qualify for federal protections may qualify for state and local programs. However, these programs aren’t always well-publicized.
“HUD-certified housing counselors are well-versed in all federal, state, and local programs available to both homeowners and renters,” Gaitan says. “They can help a homeowner or renter become fully informed on relief programs. They can also help you understand options that can help save your home or make the easiest exit possible.”
What to expect when you work with a housing counselor
Consultations with counselors from HUD-approved housing counseling organizations are confidential and free of charge. A homeowner or renter can speak to a counselor one-on-one to create a personalized action plan. Even if a homeowner or renter is still facing challenges with unemployment, there may be forbearance options that can help them get by, and then they can create an action plan for catching up once they find new employment.
“Situations where someone is at risk of losing their home can feel overwhelming,” Gaitan says. “But it’s important to realize that there are options available. Talking to a qualified housing counselor can help ease the financial stress you are under. So, it is important to realize that there is hope and there is help available.”
Call 1-800-435-2261 for a free consultation with a HUD-certified housing counselor.
When challenges like unemployment or divorce leave you unable to pay your mortgage, the idea of facing foreclosure can be overwhelming. This guide helps homeowners understand what steps to take to avoid foreclosure, as well as mortgage relief options that can help you either save your home or make a graceful exit without the financial upset of foreclosure.