COVID-19: What are the requirements for using the COVID-19 Forbearance?

Regardless of the delinquency status of the Mortgage, all FHA-insured Borrowers, impacted directly or indirectly by COVID-19, may request a COVID-19 Forbearance from their Mortgage servicer. Mortgagees may approve the initial COVID-19 Forward Forbearance no later than February 28, 2021.

If a Borrower is experiencing a financial hardship negatively impacting their ability to make on-time Mortgage Payments due to COVID-19 and requests a COVID-19 Forbearance, the Mortgagee must offer the Borrower a COVID-19 Forbearance.

The Mortgagee may utilize any available method for communicating with a Borrower regarding a COVID-19 Forbearance to meet these requirements. Acceptable methods of communication regarding a COVID-19 Forbearance include, but are not limited to, emails, text messages, fax, teleconferencing, websites, web portals, etc. If a Mortgagee sends out a general communication advising that a COVID-19 Forbearance is available, the Borrower may reply to that communication requesting a COVID-19 Forbearance via email, phone call, or any other method of communication clearly made available to the Borrower by the Mortgagee.

The initial COVID-19 Forbearance period may be up to six months. If needed, an additional COVID-19 Forbearance period of up to six months may be requested by the Borrower and must be approved by the Mortgagee. The combined maximum COVID-19 Forbearance period must not exceed 12 months.

The term of the initial or extended COVID-19 Forbearance may be shortened at the Borrower’s request.

The Mortgagee must waive all Late Charges, fees, and penalties, if any, as long as the Borrower is on a COVID-19 Forbearance Plan.

Mortgagees must complete a Loss Mitigation Option for eligible Borrowers no later than 90 days from the earlier of the date of completion or expiration of the COVID-19 Forbearance. For Home Disposition Options, a signed Approval to Participate (ATP) Agreement or a signed Deed-in-Lieu (DIL) Agreement will meet this requirement.

Owner-Occupant Borrowers who were current or less than 30 Days past due as of March 1, 2020 must be reviewed for:

  • the COVID-19 Standalone Partial Claim;

  • the COVID-19 Owner-Occupant Loan Modification;

  • the COVID-19 Combination Partial Claim and Loan Modification (Non FHA-HAMP); or

  • the COVID-19 FHA-HAMP Combination Loan Modification and Partial Claim with Reduced Documentation.  

Non-Occupant Borrowers who were current or less than 30 Days past due as of March 1, 2020, must be reviewed for the COVID-19 Non-Occupant Loan Modification..

The Mortgagee must evaluate any Borrower who is not eligible for a COVID-19 Home Retention or Disposition Option, because the Mortgage was not current or less than 30 Days past due as of March 1, 2020, for HUD’s standard Loss Mitigation Home Retention Options (III.A.2.k) and Home Disposition Options (III.A.2.l).

For Borrowers participating in the COVID-19 Forbearance, Mortgagees are granted an automatic 90-Day extension to the first legal deadline date, from the earlier of the date of completion or expiration of the COVID-19 Forbearance period, to complete a Loss Mitigation Option, or to commence or re-commence foreclosure. Mortgagees must report the appropriate loss mitigation action in the Single Family Default Monitoring System (SFDMS).

Any Borrower who is granted a COVID-19 Forbearance and is otherwise performing as agreed is not considered to be delinquent for purposes of credit reporting.

For additional FHA Policy Information, see: 

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-05565