The U.S. Department of Agriculture (USDA) has suspended foreclosures for Single Family Housing Direct Home Loans and Single Family Guaranteed Home Loans through February 28, 2021, due to the COVID-19 pandemic. The moratorium applies to the initiation of foreclosures, the completion of foreclosures in process, and evictions of homeowners from properties bought with a USDA direct or guaranteed home loan. Vacant and abandoned properties aren't covered. This moratorium is the latest extension of the initial suspension that went into effect earlier this year.
Many states, cities, and other governmental entities have also enacted emergency foreclosure moratoriums and bans on evictions due to the COVID-19 outbreak. If the foreclosure moratorium for USDA loans doesn't apply to you, one of these suspensions might.
USDA is also offering forbearances to direct home loan borrowers impacted by the coronavirus crisis. You can ask for a payment forbearance for up to one year, which may be extended for another year at your request. During the forbearance period, the servicer can't charge fees, penalties, or interest beyond the amounts calculated as if you had made all contractual payments on time.
If you can resume making your regular payments at the end of the forbearance, you'll be able to repay the skipped amounts through either:
If you can't afford to resume making your regular payments, the servicer must evaluate you for other options, like a term extension, capitalization of the arrearages, or a mortgage recovery advance.
Borrowers with mortgages directly extended by the USDA's Rural Housing Service (RHS) should be aware that they have that kind of loan. But homeowners with privately-serviced USDA RHS-guaranteed loans might not know about their loan's status. To find out if you have an RHS-guaranteed loan, ask your loan servicer or check your closing documents from when you took out the loan.
To learn more about USDA loans, go to the USDA Rural Development website.
Effective date: December 28, 2020