FHA Provides More Relief for HECM Borrowers

FHA Provides More Relief for HECM Borrowers

To assist homeowners who are still struggling to meet the requirements of their Home Equity Conversion Mortgage, the Federal Housing Administration is providing up to 12 months of relief that will allow borrowers to remain in their homes.

Details were provided in Mortgagee Letter 2021-24, which also includes forbearance relief for homeowners who have FHA forward mortgages.

“Our top priority is to help as many individuals and families as possible to recover from the COVID-19 pandemic and keep their homes,” said Principal Deputy Assistant Secretary for Housing Lopa Kolluri. “For FHA, this means that we will continue to work through all of our channels – mortgage servicers, housing counselors, and our other federal partners – to ensure we get the positive outcomes struggling homeowners need.”

According to the mortgagee letter, HECM borrowers who contacted their servicer between July 1 and September 30, 2021, and requested an extension from having their loans called due and payable can apply for up to 12 additional months of relief if they need it.

Borrowers who encounter problems after October 1, 2021, can contact their servicer and request an extension that will last up to six months or until an end to the COVID national emergency is declared by the White House. If the national emergency is still in place after six months, borrowers can ask for one additional six-month extension.

FHA urges those who are behind on their mortgage payments or are having difficulty complying with the terms of their HECM, and have not yet contacted their mortgage servicer, to do so immediately. For more information, please read the ML 2021-24.