In one of his first acts in office, President Joe Biden requested federal agencies to extend eviction and foreclosure moratoriums for millions of Americans. In response, the U.S. Department of Agriculture (USDA) announced an extension of eviction and foreclosure moratoriums on USDA Single Family Housing Direct and Guaranteed loans (SFHDLP and SFHGLP) through March 31, 2021.
According to the USDA, the COVID-19 pandemic has triggered an almost unprecedented housing affordability crisis in the United States. Today, one in 10 homeowners with a mortgage are behind on payments. In addition to the actions taken, the Biden Administration looks forward to working with Congress to take more robust and aggressive actions to bring additional relief to American families and individuals impacted by the pandemic.
Foreclosure Moratorium Extension:
The actions announced today make it possible for the foreclosure and eviction moratorium announced by USDA, Single Family Housing Direct Loan Program (SFHGLP) and the Single Family Housing Guaranteed Loan Program (SFHGLP) on August 28, 2020, to be extended until March 31, 2021. The moratorium does not apply in cases where USDA or the servicing lender has documented the property is vacant or abandoned.
Forbearance Requirements:
Lenders should continue to provide impacted borrowers relief in accordance with the CARES Act 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 should outline potential solutions that may be available at the end of the forbearance payment 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 may be charged to the borrower beyond the amounts calculated as if the borrower had made all contractual payments in a timely fashion.
Lenders may approve the initial 180-day COVID-19 Forbearance no later than the earlier of the termination date of the national emergency declared by the President on March 13, 2020 or March 31, 2021.
