Under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, homeowners with federally backed mortgage loans who've been financially affected by COVID-19, regardless of delinquency status, can get a forbearance for 180 days, plus an additional 180 days. The right to get this type of forbearance applies to borrowers with properties designed for the occupancy of one to four families, like single-family homes.
To get a forbearance, you need to contact your loan servicer within the “covered period” and affirm that you've suffered a financial hardship due to the coronavirus national emergency. However, the CARES Act doesn’t define the covered period or say when the right to get a forbearance for a one- to four-unit property ends. The CARES Act does define the covered period for forbearances in connection with multifamily properties with five or more units. But that section doesn’t apply to smaller properties.
So, the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), and the U.S. Department of Agriculture (USDA) set their own deadlines.
The deadline to request a forbearance for a mortgage on a one- to four-unit home differs based on what governmental entity backs the loan.
Fannie Mae and Freddie Mac haven't issued any guidance giving a deadline to request an initial forbearance. The latest guidance from Fannie Mae (Lender Letter LL-2020-02) says that its forbearance policies are "effective immediately and are effective until Fannie Mae provides further notice, unless otherwise stated." Similarly, Freddie Mac's issued Bulletin 2020-4 states that the forbearance plan guidelines announced in the bulletin are effective immediately. The bulletin also says, “Freddie Mac will continue to monitor the situation and may revise or revoke this temporary guidance at any time, as appropriate."
So, it's currently unclear exactly how long borrowers get to request forbearances for Fannie Mae and Freddie Mac mortgage loans. It’s reasonable to assume you may request a CARES Act forbearance until these entities issue further guidance.
The FHA announced that homeowners with FHA-insured loans, including reverse mortgages, have until February 28, 2021, to request a COVID-19 forbearance (a CARES Act forbearance) from their mortgage servicer.
The VA’s Circular 26-20-12, dated April 8, 2020, which says eligible borrowers may request forbearances for 180 days, plus an additional 180 days, says that the Circular is rescinded as of April 1, 2021. (Circulars describe current policies and procedures for servicing VA loans.)
So, it's reasonable to conclude that the deadline for forbearance requests is April 1, 2021. But the Consumer Financial Protection Bureau (CFPB) website says that the deadline is February 28, 2021.
The USDA issued a press release extending its foreclosure and eviction moratorium through February 28, 2021. The announcement also says, “Lenders of USDA guaranteed home loans should continue to provide borrowers impacted by the pandemic with relief in accordance with the CARES Act by offering forbearance of the loan payment for up to 180 days. The initial forbearance period may then be extended up to an additional 180 days at the borrower’s request.” But the press release doesn't give a deadline to request a forbearance. The CFPB website says that the USDA’s deadline to request a CARES Act forbearance is February 28, 2021.
Under the CARES Act, the “covered period” to get a forbearance for a federally backed loan on a multifamily property with five or more units begins on March 27, 2020, and ends on the sooner of December 31, 2020, or the termination of the national emergency concerning the COVID-19 outbreak declared by the president under the National Emergencies Act, which hasn't happened yet.
Even though the CARES Act set a December 31, 2020 deadline for borrowers with multifamily loans to get forbearances, the FHFA announced that Fannie Mae and Freddie Mac would continue to offer COVID-19 forbearances to qualifying multifamily property owners through March 31, 2021.
Under the CARES Act, a forbearance will last up to 180 days, and you can extend it for another 180 days, provided that you request the forbearance and extension during the covered period. So, keep the deadlines noted above in mind if you want to request a forbearance or an extension of that forbearance.
Using FHA's deadline as an example, you should request your initial forbearance by February 28, 2021. It’s unclear as to whether you have to ask for an extension by February 28 or whether you have until the initial forbearance expires to make your extension request. Until further guidance comes out, it would be safest to request your initial forbearance and extension by February 28, 2021.
To get more information about your mortgage rights under the federal CARES Act, consider talking to a foreclosure attorney or a HUD-approved housing counselor. A HUD-approved housing counselor can provide you with helpful information (at no cost) about different ways to deal with your mortgage debt and avoid a foreclosure.