Community: Mortgage Relief

On February 16, 2021, FHA published Mortgagee Letter (ML) 2021-05, “Extensions of Single Family Foreclosure and Eviction Moratorium, Start Date of COVID-19 Initial Forbearance, and Home Equity Conversion Mortgage (HECM) Extension Period; Expansion of COVID-19 Loss Mitigation Options”, FHA outlines multiple COVID-19 related policy extensions and expansions that are designed make it easier for mortgagees to provide FHA-insured homeowners with the assistance they need to retain their homes during these challenging times.

The updated guidance in this ML is effective immediately and applies to all FHA Title II Single Family programs. The ML:

  • Extends the foreclosure and eviction moratoriums through June 30, 2021 and provides a 180-day extension to the deadlines for the first legal action and the reasonable diligence time frame from the date of the moratorium expiration.
  • Extends the dates to request an initial COVID-19 Forbearance or a COVID-19 Home Equity Conversion Mortgage (HECM) extension period through June 30, 2021.
  • Adds two COVID-19 forbearance and COVID-19 HECM extension periods of up to three months each for borrowers who requested their initial COVID-19 forbearance or COVID-19 HECM extension period on or before June 30, 2020 and are coming to the end of their 12-month period.
  • Expands eligibility for the COVID-19 loss mitigation options for certain borrowers regardless of whether they received a COVID-19 forbearance.
  • Eliminates the restriction on the number of permanent COVID-19 home retention options a borrower can receive.

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