April 16, 2020
The Department of Housing and Urban Development has issued guidance clarifying certain aspects of the coronavirus mortgage relief options; there are instructions for multi-family loans as well as for single-family FHA mortgages. Why are the multi-family rules good for the single-family borrower to understand?
Borrowers with multi-family FHA loans who need of COVID-19 mortgage relief have similar requirements to those for single-family borrowers.
If you know the approach your lender takes for FHA loans, you can make more fully informed choices about your loan including when to apply for economic relief and what options to choose.
Borrowers have the option to request six months of loan forbearance or as much as a full year, depending on circumstances. Should you take the full year? Cut off the relief as soon as you are able to resume payments again? Something in between?
That is a set of questions both single-family borrowers and multi-family FHA borrowers have to face. To help borrowers, HUD is “implementing a standard forbearance protocol to reduce paperwork and streamline processing for multifamily borrowers, servicers, and lenders.”
“The mortgage relief guidelines are applicable “during the covered period of the CARES Act, which begins March 27, 2020 and continues until the earlier of the termination date of the national emergency declared by the President on March 13, 2020 or December 31, 2020”.
The HUD official site says, “effective immediately, a multifamily borrower with a FHA insured mortgage loan that was current on its payments as of February 1, 2020, may submit an oral or written request for forbearance to the borrower’s servicer affirming that the multifamily borrower is experiencing a financial hardship during the COVID-19 emergency.”
Like single-family mortgages, FHA multi-family loan relief requires the borrower to contact the loan servicer to make arrangements for mortgage relief.
Remember, there is NO automatic forbearance of mortgage payments and you should not expect loan forbearance if you have not contacted the lender to make arrangements AND you let too many missed payments happen. Act as soon as possible for best results.
How many missed payments are too many? You will need to ask your loan officer without delay.
What should FHA borrowers in single-family homes do to qualify for their own mortgage relief options? The same thing the agency encourages multi-family borrowers to do–contact the lender as soon as possible. Do it before there is a missed payment on your record.
Why? Look at what HUD tells multifamily borrowers about their FHA COVID-19 relief options:
“Under the CARES Act, effective immediately, a multifamily borrower with a FHA insured mortgage loan that was current on its payments as of February 1, 2020, may submit an oral or written request for forbearance to the borrower’s servicer affirming that the multifamily borrower is experiencing a financial hardship during the COVID-19 emergency.” The emphasis in that paragraph is ours, and it’s a good indication of what YOU should do to claim your FHA mortgage relief.
Do not wait until you have missed a mortgage payment to contact your lender. Act today to get the most flexible options to save your property.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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