Help With Mortgage Payments After Losing Your Job: What to Do Next

If you need help with mortgage payments after losing your job, it's important to act quickly to protect your home and credit. Falling behind on your mortgage doesn't automatically mean you'll lose your home, but ignoring the problem can lead to foreclosure.

The good news is that if you need help with your mortgage, there are several programs and options available to help you stay on track. Depending on your situation, you might qualify for a break from payments, a loan modification that lowers your monthly payments, or assistance through a government or lender program.

But it's important to act quickly and proactively to explore options that can help you deal with your mortgage payments. Taking early, proactive steps can make all the difference in keeping your home, maintaining good credit, and preserving or regaining your financial stability.

Understanding Your Options When You Need Help With Your Mortgage

Understanding your options is the most important first step when seeking mortgage help. That way, you can make informed decisions and protect your home, finances, and credit.

Some loss mitigation options, such as a repayment plan, forbearance agreement, or loan modification, allow you to keep the home. These options might have little or no effect on your credit, depending on how the lender reports your loan to the credit reporting bureaus. Other alternatives, like a short sale or deed in lieu of foreclosure, enable you to give up the property without going through a foreclosure. These options will probably damage your credit more, but it might make sense financially to give up your home in some cases. Also, if you have a Fannie Mae, Freddie Mac, FHA, VA, or USDA loan, you have access to special foreclosure avoidance programs.

As you get started in the loss mitigation process with your loan servicer, consider seeking guidance from a HUD-approved housing counselor who can explain the pros and cons of each choice.

Once you understand your options, you can take proactive steps to (hopefully) keep your home, and to manage your finances and credit.

How Job Loss Affects Your Mortgage and What You Can Do

Losing your job doesn't alter your mortgage or your obligation to make payments on the loan. The original loan agreement, including the interest rate, payment schedule, and loan term, remains the same regardless of your employment status.

However, losing your job can make it difficult to manage your mortgage payments. Without a steady income, you might fall behind in payments. So, it's crucial to communicate with your loan servicer as soon as possible. Many lenders and investors offer assistance programs, such as forbearance or loan modifications, which can provide relief by reducing or suspending payments while you get back on your feet, or you might qualify for a government program that provides mortgage relief to homeowners. Promptly exploring these options can help you avoid defaulting on your mortgage and a foreclosure.

Remember, losing your job doesn't automatically mean losing your home. But you should immediately take action to address the situation and explore all possible mortgage relief options that might help you while you're unemployed.

Mortgage Relief: Programs That Help With Payments

If a temporary hardship, such as a job layoff, causes you to fall behind in your mortgage payments, a forbearance agreement could help you.

Forbearance: Temporary Help With Mortgage Payments

With a "forbearance agreement," your mortgage servicer agrees to reduce or suspend your monthly mortgage payments for a set amount of time. At the end of the forbearance, you generally must resume the full payment and get current on the missed payments, including principal, interest, taxes, and insurance. You can usually do this by:

• paying the lender a lump sum
• paying a portion of the overdue amount along with your regular mortgage payment over time
• deferring repayment until the loan ends, or
• completing a modification in which the lender adds the amount you owe to the loan balance.

Sometimes, the servicer can extend the forbearance if your hardship isn't resolved by the end of the forbearance period. You won't be subject to foreclosure during the forbearance period.

FHA Special Forbearance for Unemployed Homeowners

If you have a loan insured by the Federal Housing Administration (FHA) and lose your job, you might be eligible for a "special forbearance" (SFB). This program is designed to give homeowners a chance to stay in their homes until they land a new job and resume making their regular mortgage payments. The program was due to expire in August 2013, but FHA extended it indefinitely.

An SFB could last one year, but there is no maximum term limit. Also, it might be followed by a payment schedule based on your ability to pay or another option that will cure the default.

Mortgage Loan Modification Options to Lower Your Payments

A "loan modification" is a long-term change to your current loan terms, like an interest-rate reduction, which then lowers the monthly payment to make the loan more affordable.

To get a modification, you'll have to be able to show that your household has a steady stream of income and you can make payments under a modified loan. This requirement might be hard to meet when you're unemployed. But if you have an employed spouse or other breadwinners living in the home, you might qualify.

Fannie Mae or Freddie Mac Flex Modification Program

If Fannie Mae or Freddie Mac owns your loan, you might qualify for the Flex Modification program, which can lower your mortgage payment by around 20%. You'll have to show that your household has a steady income stream and can make payments under a modified loan.

Various other kinds of modifications are also available to borrowers with Fannie Mae or Freddie Mac loans.

Loan Modifications for FHA and VA Loans

Government entities, like the FHA and Veterans Administration (VA), offer special kinds of modifications for borrowers with FHA-insured and VA-guaranteed loans.

The FHA also offers various other options, such as repayment plans, forbearance, loan modifications, and partial claims to help homeowners bring their mortgage current and avoid foreclosure.

Veterans with VA-backed mortgages might qualify for other kinds of assistance as well, such as the new VA partial claim program.

In-House Mortgage Modification Programs

Many lenders have their own in-house ("proprietary") mortgage modification programs. Again, you'll have to show that your household has a steady stream of income and can make payments under a modified loan.

Homeowner Assistance Fund and Local Mortgage Help Programs

The American Rescue Plan Act of 2021 included approximately $10 billion to create a federal Homeowner Assistance Fund (HAF). This fund provided money to all 50 states and the District of Columbia so they could establish foreclosure avoidance and other homeowner-relief programs. Each HAF program developed its own eligibility requirements. Usually, you must have a financial hardship (a loss of income or increased expenses) that occurred on or after January 21, 2020, because of COVID-19. As of late 2025, only a small handful of HAF programs remain open. Still, it's worth checking your state housing agency's website (sometimes called a "housing authority") to find out if HAF assistance is still available where you live.

If the HAF program in your state is closed, your state's housing agency might also have information about other housing assistance programs offered through a nonprofit organization or by your city, county, or state. For example, Pennsylvania offers the Homeowners' Emergency Mortgage Assistance Program, which helps homeowners in Pennsylvania who, through no fault of their own, are financially unable to make their mortgage payments and in danger of losing their homes to foreclosure.

Check your state housing agency's website to find out if state or local assistance is available where you live. Search for terms like "foreclosure assistance," "mortgage relief," and "foreclosure prevention." You can also call the agency and ask about available mortgage help.

When to Consider Giving Up Your Home

If you can't qualify for any type of assistance or mortgage relief program and it looks like you won't be able to find employment at a similar level of income, it's time to think about whether you should maybe give up the property through a short sale or deed in lieu of foreclosure and find cheaper housing. However, with all of the mortgage help available (both short-term and long-term), hopefully, you won't need to pursue either of these options.

How Will Getting Mortgage Relief Affect My Credit?

If you're looking for help with mortgage payments, it's best to work out an arrangement before you actually miss a payment. Options like forbearance, deferrals, and loan modifications typically won't hurt your credit score if your payments are reported as current. In some cases, creditors use special reporting codes so that payment relief, such as during a government shutdown, doesn't negatively impact your credit.

Steps to Take If You Need Help With Mortgage Payments

If you need help with your mortgage, begin by contacting your loan servicer immediately to explain your situation and inquire about available assistance programs or options. Be ready to provide details about your income, expenses, and the reason for your difficulty making payments. You'll also need to fill out any mortgage assistance paperwork your servicer gives you, which helps them assess what loss mitigation options might be possible in your case.

Also, reach out to a HUD-approved housing counselor for free guidance and advice. They can help you understand your best options and guide you through the loss mitigation process by helping you interact with your servicer and complete the required documentation.

If you're facing a foreclosure and have received legal notices, you might also consider talking to a lawyer.

Frequently Asked Questions About Mortgage Relief After Job Loss

The following FAQs answer common questions about help with mortgage payments if you lose your job.

What is mortgage relief, and how can it help if I lost my job?

Mortgage relief consists of programs and initiatives designed to help homeowners manage their payments when facing a financial hardship, such as a job loss, by temporarily modifying or suspending mortgage payments or providing another form of relief. It can help people who have lost a job avoid foreclosure, keep their homes, and ease financial stress.

Who qualifies for mortgage relief programs after a job loss?

Eligibility for mortgage relief after a job loss typically requires demonstration of a financial hardship, such as proving unemployment or a significant reduction in income, and meeting basic eligibility criteria, which might include the type of mortgage, current loan status, and income thresholds. For many programs, you must be living in the home as your primary residence to qualify for mortgage relief.

How do I apply for mortgage relief or assistance? Who should I contact first?

Start by contacting your mortgage servicer directly to discuss possible solutions. The servicer is responsible for reviewing loss mitigation applications and offering assistance options. Additionally, you can get help from a HUD-approved housing counselor who can help you interact with the servicer and fill out paperwork. A housing counselor can also inform you about any state or local mortgage relief programs. You'll have to submit a separate application to get relief from one of these types of programs, and your housing counselor can help you in the process.

How soon should I notify my lender or servicer after losing my job?

You should contact your loan servicer immediately, before you miss a mortgage payment. Early communication raises the chance of getting a mortgage relief option and can prevent the risk of falling behind in payments and going into foreclosure.

What happens when the forbearance or relief period ends?

When a forbearance or relief period ends, you'll probably be required to resume making your mortgage payments. In the loss mitigation process, you'll have to come to an arrangement about how to deal with the missed payments. The lender might add them to the loan balance or you might have to repay them in a repayment plan. It's important to discuss repayment options while you're working out the original loss mitigation agreement, so there aren't any surprises when the relief period ends.

What can I do if my home goes into foreclosure?

Even if your home goes into foreclosure, you can still pursue alternatives. You have rights and protections during the process, which can take a long time in certain states, as well as options to potentially save your home.

Where to Get Help With Your Mortgage

If you need additional information on any of the programs mentioned in this article or have general questions about how to get help with your mortgage, again, it's a good idea to talk to a HUD-approved housing counselor. They can help you navigate your options, work with your loan servicer, and develop a plan to manage your mortgage payments while you're unemployed.

If a foreclosure is imminent, consider also consulting with a foreclosure lawyer. In addition to explaining your options, a lawyer can represent you in the foreclosure action and tell you about all of your legal rights. Understanding your rights and taking advantage of all available resources can make a significant difference in whether you'll be able to keep your home.