Greater Ohio Policy Center

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Responding to COVID-19: Disaster Relief Options for FHA Homeowners

Was your ability to make your mortgage payments harmed by an event that has been declared a disaster? The recent outbreak of COVID-19 and the declaration of a “national emergency” by the President of the United States means that you may qualify for relief to help you keep your home.

Much of the mortgage industry and The United States Department of Housing and Urban Development are committed to assisting borrowers whose lives and livelihoods are thrown into turmoil by a disaster.

If you can't pay your mortgage because of the disaster, your lender may be able to help you. If you are at risk of losing your home because of the disaster, your lender may stop or delay initiation of foreclosure for 90 days. Lenders may also waive late fees for borrowers who may become delinquent on their loans as a result of the disaster.

If you have a conventional mortgage, you are strongly encouraged to contact your lender for further information, and to see if you are eligible for relief.

If you have an FHA-insured mortgage, please continue reading to find out what options may be available to you.

How Can This FHA Disaster Relief Help Me?

HUD has instructed FHA lenders to use reasonable judgment in determining who is an "affected borrower." Lenders are required to reevaluate each delinquent loan until reinstatement or foreclosure and to identify the cause of default. Contact your lender to let them know about your situation. Some of the actions that your lender may take are:

  • During the term of a moratorium, your loan may not be referred to foreclosure if you were affected by a disaster.

  • Your lender will evaluate you for any available loss mitigation assistance to help you retain your home.

  • Your lender may enter into a forbearance plan, or execute a loan modification or a partial claim, if these actions will help retain and pay for your home.

  • If saving your home is not feasible, lenders have some flexibility in using the pre-foreclosure sales program or may offer to accept a deed-in-lieu of foreclosure.

You can learn more about what options may be available to you directly from the Department of Housing and Urban Development’s National Servicing Center.

There is additional information that is relevant to local government from these entities (specifically HUD) including eligible usage of CDBG funds (click here) .

Below is additional general guidance for natural disasters, providing general insight into policies and procedures regarding assisting homeowners with foreclosure avoidance.

Thank you to Michael Halpern with MuniReg for sharing this information. GOPC will continue to provide information about various programs to provide relief to communities throughout the ongoing COVID-19 outbreak.