Virginia Passes New Law Allowing Homeowners to Delay Foreclosure During the Coronavirus Crisis

A new law in Virginia allows homeowners affected by COVID-19 to get a 30-day stay of foreclosure.

With the coronavirus (COVID-19) pandemic sending thousands of homeowners into financial distress, many states, along with the federal government, have passed laws and issued orders imposing foreclosure moratoriums for specific types of loans and in many places. These foreclosure moratoriums, depending on the order or regulation, usually prohibit the initiation or continuation of foreclosures until the public health emergency due to coronavirus ends.

A new Virginia law, H340, which went into effect on April 22, 2020, provides the right to get a 30-day foreclosure stay (halt in legal proceedings) to homeowners who've been affected by the coronavirus outbreak during the governor-declared state of emergency.

History of the Legislation

H340, which adds new § 44-209 to the Virginia Code, previously passed in the legislature's general session earlier this year. The bill initially allowed U.S. government employees and contractors to request and get a 30-day stay of foreclosure during a government shutdown. New protections for homeowners affected by the coronavirus pandemic were added to the bill at the governor's recommendation in light of the ongoing COVID-19 crisis.

Foreclosure Moratorium During the Coronavirus Emergency

Under the new Virginia law, any homeowner who is "affected by" the coronavirus pandemic during the governor-declared state of emergency, who defaults on a note, and is subject to a Virginia foreclosure can get a 30-day stay in the process. ("Affected by" means you've experienced a loss of income from a public or private source due to the COVID-19 emergency.)

The moratorium applies to one- to four-family residential properties located in Virginia.

How to Get a Stay of Foreclosure

You can request a stay or continuance, as applicable, by providing written proof to a court or lender, as appropriate, stating that you're not currently receiving wages or payments from a public or private source because of the coronavirus emergency.

To get the stay, you'll need to provide "written proof" of your income loss, which means you need to show:

  • a paystub showing zero dollars in earnings for a pay period within the period for which the governor has declared a state of emergency in response to the novel coronavirus (COVID-19) pandemic public health crisis
  • a copy of a furlough notification letter or essential employee status letter indicating your status as nonessential due to the emergency, or
  • any other documentation deemed appropriate by a court or lender.

When the Coronavirus Provisions Expire

For homeowners affected by the coronavirus crisis, the right to get a 30-day foreclosure stay expires 90 days following the end of the state of emergency declared by the governor in response to the COVID-19 pandemic. (The part of the law that applies to government workers and contractors, however, will remain in effect when the coronavirus-related portion of the legislation expires.)

Currently, Virginia Governor Northam has declared a state of emergency through June 10, 2020, so the coronavirus section of the law will terminate after September 8, 2020; however, the state of emergency might be extended.

Effective date: April 22, 2020