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Mortgage Assistance Options for Borrowers Impacted by COVID-19

Aug 26, 2020

Fannie Mae and Freddie Mac, the organizations that own the majority of mortgages in the United States and set mortgage industry guidelines that the most lenders follow, announced a number of assistance measures for borrowers negatively impacted by the COVID-19 crisis. A similar set of policies apply to FHA and USDA loans and many national and regional lenders have adopted their own mortgage assistance programs.

If you have experienced a job loss, layoff or pay reduction due to the current health crisis and are struggling to pay your mortgage, these programs may offer financial relief and help you stay in your home.

The response to COVID-19 by regulators, agencies and certain lenders represents a stark contrast to the Great Recession, which saw millions of borrowers lose their homes to foreclosure. The initiatives outlined below are all designed to help keep people in their home. Plus, these programs are free and borrowers are not charged any fees, penalties or additional interest in most cases.

Below, we summarize the homeowner relief programs Fannie Mae, Freddie Mac, the FHA, USDA and other lenders are offering and answer key questions you may have.

Overview of COVID-19 Mortgage Assistance Options

Foreclosures and mortgage default-related evictions are suspended for 60 days as of March 13, 2020 for Fannie Mae and Freddie Mac-owned loans, as of March 18 for FHA loans and as of March 19 for USDA loans.

This means that you have a 60 day reprieve if you are at risk of losing your home due to foreclosure for any reason.  Please note that this guideline may not apply to vacant or abandoned properties.

Borrowers financially affected by COVID-19 are eligible for mortgage forbearance for up to one year.

Forbearance means that your mortgage payments are suspended or in some cases reduced, although interest may continue to accrue on your loan, so you should confirm this point with Fannie Mae, Freddie Mac, the FHA, USDA or your mortgage servicer.  Borrowers that participate in a forbearance program are not subject to late fees and any missed or late payments are not reported to the credit bureaus so your credit score should not be negatively affected.

At the end of the forbearance plan, borrowers who cannot afford their mortgage payments may be eligible for a loan modification that reduces their ongoing monthly payment.

A loan modification is a permanent change in your mortgage terms designed to make your loan — plus your property tax, homeowners insurance and other housing-related expenses — more affordable.  Fannie Mae, Freddie Mac, the FHA and USDA have guidelines in place to ensure that the modification is sustainable and reflects your financial situation at that time. Please note that to be eligible for most COVID-19 related loan modifications, you must have been current or less than 31 days delinquent on your mortgage as of March 13, 2020.

More flexible mortgage payment deferral program

If you missed monthly mortgage payments due to temporary challenges, but you have recovered financially and are able to make your payments in the future, your missed principal and interest payments may be added to your loan amount if you are not able to bring your mortgage current.  You are not charged interest on the amount of the deferral that is added to your loan balance and you are not charged any processing or late fees for the deferral.

The best way to demonstrate how this program works is with an example.  Let’s say you miss your mortgage payment for two months due to a layoff or job loss but then you resume work.  You may be able to afford your monthly mortgage payment again but you may not be able to afford to bring your loan current by paying the past due interest and principal.

In this case, the amount of the missed payments is added to your mortgage balance and you pay off this added balance when you pay off your loan.  You do not pay any interest on the payment deferral and you should not be charged any fees or penalties to participate in the program.

To be eligible for this specific mortgage payment deferral program you must make your full monthly payment in the month you apply for the deferral.  There are additional guidelines you must meet to qualify so it is important to review program terms with Fannie Mae, Freddie Mac, the FHA or USDA and your mortgage servicer.

Please note that if your loan is owned or secured by Fannie Mae or Freddie Mac, your mortgage servicer may receive $500 and be reimbursed for certain transaction costs so they are incentivized to help you with the payment deferral.

For borrowers whose mortgage is owned by Fannie Mae, access to its Disaster Response Network.

You can use this Fannie Mae service to understand your mortgage assistance options and to work with a HUD-approved counselor to develop a plan tailored to your individual needs.  The Disaster Response Network can also help you communicate with your mortgage servicer — the company you make your mortgage payments to — and other third parties including homeowners insurance companies.  You can contact the Fannie Mae Disaster response network by calling 1-877-542-9723.

We also want to highlight that in many cases you are not required to document the COVID-19 financial hardship that you are experiencing.  This removes a potential obstacle and makes it easier to qualify for these programs.

Additionally, these mortgage assistance options are applicable to primary and second homes as well as one-to-four unit investment properties.

How Do I Determine if I am eligible for the mortgage assistance outlined above?

To be eligible for these specific assistance measures, you need to have an FHA or USDA loan or your mortgage needs to be owned or secured by Fannie Mae or Freddie Mac.  Please note that even if Fannie Mae or Freddie Mac own or secure your loan, you usually make your monthly payment to a different company, called a mortgage servicer.  You can use the resources below to determine if Fannie Mae or Freddie Mac own your mortgage.

Fannie Mae Loan Lookup Tool

Freddie Mac Loan Lookup Tool

If Fannie Mae or Freddie Mac own your loan and you are struggling to make your payment, your first step is to call them.  They can help you understand the resources available to you, navigate mortgage assistance options and explain how to work with your servicer. We have provided contact information for these organizations below.

Fannie Mae


Fannie Mae COVID-19 Response Website

Freddie Mac


Freddie Mac COVID-19 Response Website

If you have an FHA or USDA loan, your first step is to contact your lender or mortgage servicer.  You can also contact the FHA or USDA with any questions or if your lender is not aware of the assistance programs that are available.

Federal Housing Administration


FHA Website



USDA Rural Development Website


What should I do if I am impacted by COVID-19 and my mortgage is not owned by Fannie Mae or Freddie Mac or insured by the FHA?


In this case, your first step should be to call your mortgage servicer — the company you make your payment to.  Even if your loan is not covered by the guidelines outlined above, your lender should be willing to work with you to develop a solution that keeps you in your home.


During this unprecedented time of uncertainty we are seeing many companies do the right thing even if they are not legally obligated to do so. For example, Bank of America, Chase, Citibank, U.S. Bank, Wells Fargo and approximately 200 other banks and credit unions announced penalty-free, non-interest bearing mortgage forbearance and payment deferral programs for up to 90 days for borrowers negatively affected by COVID-19.


If your lender is not cooperative, we recommend that you review the resources available through HUD’s Making Home Affordable Program. HUD offers counseling and foreclosure prevention services to help borrowers who are struggling to pay their mortgage.

HUD Making Home Affordable Program

We also provide a link below to multiple refinance assistance programs that may be helpful to you.  This list includes several conventional and government-backed refinance programs so you can review a wide range of financing options.

Mortgage Refinance Assistance Programs

The final point we want to reiterate is that all of the programs listed above are available to borrowers at no cost. If someone attempts to charge you to provide access to these programs or to defer or modify your loan, this is a scam. Some people try to exploit vulnerable borrowers during trying times but you can avoid this outcome if you are informed and know your options.


We recognize that these are challenging times, especially if you are experiencing financial challenges and cannot pay your mortgage.  It is important to know that if you are struggling financially due to COVID-19, there are multiple assistance options to help you stay in your home.



Michael co-founded FREEandCLEAR in 2012 with his father, Harry. The opportunity to partner with his Dad to enable people to make better decisions and save money when they get a mortgage was too good to pass up. Michael brings a wealth of experience in finance and working with leading Internet companies to his position at FREEandCLEAR. Michael focuses on implementing FREEandCLEAR’s mission by empowering its user community through information and education and by providing high-quality mortgage tools and resources.

Prior to starting FREEandCLEAR, Michael served as Global Head of Internet Investment Banking for Credit Suisse. Michael worked in investment banking for 13 years, holding positions with Credit Suisse, Deutsche Bank and BT Alex. Brown and spent the majority of his finance career covering the Internet and New Media sectors. Michael has advised companies on numerous financing and advisory transactions including private placements, initial public offerings, follow-on equity offerings, convertible debt, leverage lending and bank financing as well as mergers, acquisitions and divestitures.

Michael’s clients included many leading domestic and international Internet and New Media companies. He has taken the best lessons learned from his experience – the user comes first, foster community interaction, focus on the long term – and applied them to develop FREEandCLEAR.

Michael’s passions include surfing, soccer, screenwriting, running, backpacking, building things and helping others. Michael holds degrees in History and Economics from Stanford University. While in college, Michael interned in the U.S. Senate.