The U.S. Department of Agriculture announced an extension of eviction and foreclosure moratoriums on USDA Single Family Housing Direct loans and Guaranteed loans through June 30. (The moratorium does not apply in cases where USDA or the servicing lender has documented the property is vacant or abandoned.) Those actions will bring relief to residents in rural America who have housing loans through USDA.
“USDA recognizes that the COVID-19 pandemic has triggered an almost unprecedented housing affordability crisis in the United States,” USDA Deputy Under Secretary for Rural Development Justin Maxson said. “That’s why USDA is taking this important action to extend relief to the hundreds of-thousands of individuals and families holding USDA Single Family Housing loans.
“While these actions are an important step for them, we need to do more. The Biden administration is working closely with Congress to pass the American Rescue Plan to take more robust and aggressive actions to bring additional relief to American families and individuals impacted by the pandemic.”
In addition to the foreclosure moratorium, the action taken by USDA also extended the mortgage forbearance deadline. According to the USDA, lenders may continue to provide impacted borrowers relief by offering forbearance of the borrower guaranteed loan payment for up to 180 days. In addition, the initial forbearance period may be extended up to an additional 180 days at the borrower’s request.
Lenders may approve the initial 180-day COVID-19 forbearance no later than June 30, 2021. SFHGLP borrowers that received a COVID-19 forbearance prior to June 30, 2020, may be granted up to two additional three-month payment forbearances. Lenders should outline potential solutions that may be available at the end of the forbearance period and explain to borrowers that a lump sum payment of the arrearage will not be required.
During the forbearance options outlined above, no accrual of fees, penalties, or interest should be charged to the borrower beyond the amounts calculated as if the borrower had made all contractual payments in a timely fashion.
Upon completion of the forbearance, the lender shall work with the borrower to determine if they can resume making regular payments and, if so, either offer an affordable repayment plan or term extension to defer any missed payments to the end of the loan. If the borrower is unable to resume making regular payments, the lender should evaluate the borrower for special relief measures, which include term extensions, capitalization and term extensions, and a mortgage recovery advance.
Visit www.rd.usda.gov/coronavirus for additional information on USDA’s Rural Development COVID-19 relief efforts, application deadline extensions, and more. Homeowners and renters can also visit www.consumerfinance.gov/housing for up-to-date information on their relief options, protections, and key deadlines from USDA, the Department of Housing and Urban Development, the Department of Veterans Affairs, the Federal Housing Finance Agency, and the Consumer Financial Protection Bureau.
USDA Rural Development provides loans and grants to help expand economic opportunities and create jobs in rural areas. This assistance supports infrastructure improvements; business development; housing; community facilities such as schools, public safety and health care; and high-speed internet access in rural areas. For more information, visit www.rd.usda.gov.