Fannie Mae, Freddie Mac Announce New Payment Deferral Option to Repay CARES Act Forbearances

Fannie Mae and Freddie Mac announced that they’re rolling out a new payment deferral option for borrowers who finish a CARES Act forbearance.

Under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, a homeowner with a federally backed mortgage loan, regardless of delinquency status, who's experiencing a financial hardship due directly or indirectly to COVID-19, can get a forbearance of up to a year. But a forbearance isn't the same as loan forgiveness. So, you'll still owe the amounts you skipped paying after a forbearance period ends.

If you have a Fannie Mae or Freddie Mac loan, you can pay the skipped amounts:

  • in a lump sum (under official loan servicing guidelines, if you have a Fannie Mae or Freddie Mac loan, the servicer can't force you to make a lump-sum payment if you can't afford it)
  • with a repayment plan
  • by entering into a modification in which the lender adds the unpaid amounts to the balance of the loan, or
  • through a new COVID-19 payment deferral program in which the lender defers repayment of the missed amounts until the end of the loan.

Under the new COVID-19 payment deferral program, which goes into effect July 1, 2020, borrowers who complete a coronavirus-related forbearance plan don't have to repay the missed payments until they sell their house, refinance their current mortgage, or their loan matures. (To learn more about this program, read Mortgage Payment Deferral for Freddie Mac and Fannie Mae Mortgages.)

Effective date: July 1, 2020