The relief for struggling homeowners is part of a coordinated effort among The Department of Housing and Urban Development, Department of Veterans Affairs and Department of Agriculture. Many of the protections put in place last spring were due to expire next month, leaving many at risk of falling further into debt and losing their homes.
Together, these actions will cover 70% of existing single-family home mortgages.
“Extending the forbearance available on federally-backed mortgages is a critically important move to preserve homeownership for millions of households that have seen income disruption or outright job loss due to the pandemic,” said Greg McBride, chief financial analyst at Bankrate.com. “The year-long forbearance initially afforded through the CARES Act seemed sufficient at the time, but the pandemic and its economic fallout is dragging on far longer than had been expected.”
The six months’ of additional forbearance, which will be available in three month increments, reflects the expectation that long-term unemployment will be an ongoing issue even after the pandemic is over and the economy begins to reopen, McBride said.
Extending the possibility to enter into forbearance until June 30th, “will prove hugely beneficial to those that lose their jobs in the months ahead,” he said.
The Biden administration said this protection is aimed at benefiting the 2.7 million homeowners currently in forbearance and extending the availability of relief options for the nearly 11 million government-backed mortgages nationwide.