FHA Mortgage Forbearance in 2021: How it Works and Who Gets It

FHA forbearance graphic

This page explains how FHA mortgage forbearance works in 2021, the process for requesting it, and other related aspects of the CARES Act. This information has been fully updated for 2021 to reflect new extensions, deadlines, and other time-sensitive updates to the program.

FHA Mortgage Forbearance Under the CARES Act

FHA mortgage loan forbearance is part of the CARES act, an economic assistance measure passed in 2020 to combat the financial impact of the coronavirus pandemic.

CARES stands for he “Coronavirus Aid, Relief, and Economic Security Act,” the full name of this legislation. It was signed into law in March 2020. Sections 4022 and 4023 deal with mortgage loans and forbearance.

Essentially, the CARES Act protects homeowners who have federally-backed home loans (like FHA and VA) from foreclosure. It gives these homeowners the right to request a mortgage forbearance plan for up to 180 days, in cases of COVID-related financial hardship.

Definition: Within the context of home loans, forbearance is when your mortgage lender or loan servicer allows you to “pause” or reduce your monthly mortgage payments for a specific period of time. Forbearance does not erase or forgive your debt. You still have to make the payments eventually.

Many FHA-insured home loans qualify for mortgage forbearance under the CARES Act. Here, we are talking about loans that are federally insured through the Federal Housing Administration, part of HUD.

HUD Forbearance quote

The Department of Housing and Urban Development (HUD) recently published a fact sheet that, among other things, explains how FHA mortgage forbearance works in 2021 based on the CARES Act requirements.

The HUD fact sheet states the following:

“A forbearance is a temporary postponement or reduction of mortgage payments. It is not payment forgiveness. Under the CARES Act, borrowers are entitled to an initial forbearance period of up to 180 days, upon a borrower’s request. Also, upon a borrower’s request, the forbearance must be extended for up to an additional 180 days.”

Their fact sheet goes on to explain that the homeowner / borrower can shorten the forbearance plan and resume making the monthly payments, at any time they choose. In other words, you’re not locked into it for the full effective period.

How to Request FHA Mortgage Forbearance

If you currently have an FHA loan associated with your home, you may be able to request a forbearance of up to 180 days. By design, the request process is fairly straightforward with minimal paperwork.

Here are the general steps involved:

1. Find out who services your FHA loan.

The first step when requesting FHA mortgage forbearance in 2021 is to find out who currently services your loan. It might be the bank or lender you went to when you first obtained the loan. Or, it might be a third-party company that specializes in “servicing” home loans.

In some cases, the servicer that you pay each month doesn’t actually own the mortgage loan. So there might be an “owner” as well as a “servicer.” It varies.

You should be able to find the number for your mortgage servicer on your monthly statements or coupon book. If that doesn’t work, you can also use a “lookup” tool to find out who is servicing your FHA loan.

HUD recommends using the servicer lookup tool provided by Mortgage Electronic Registration Systems, Inc. (MERS). You can then move on to the next step below.

2. Tell your servicer you want to request forbearance.

Once you’ve determined who your FHA loan servicer is, you can request a mortgage forbearance.

As it states on the HUD website, you are not required to document your financial hardship. Or, in their words: “No documentation is required to prove your hardship beyond your assertion that you are suffering a hardship.”

In other words, it should be sufficient for you to tell your loan servicer you’re experiencing a financial hardship. You should not have to provide bank statements or other “evidence” to support that claim. That’s the whole point of the mortgage forbearance part of the CARES Act. It’s designed to make it easy for struggling Americans to temporarily “pause” or reduce their monthly loan payments, due to hardship.

Here’s the applicable text from the CARES Act that talks about requesting FHA mortgage loan forbearance in 2021. This comes from Section 4022:

“During the covered period, a borrower with a Federally backed mortgage loan experiencing a financial hardship due, directly or indirectly, to the COVID-19 emergency may request forbearance on the Federally backed mortgage loan, regardless of delinquency status, by (A) submitting a request to the borrower’s servicer; and (B) affirming that the borrower is experiencing a financial hardship during the COVID-19 emergency.”

As you can see, the process is fairly straightforward. A borrower who wants to request FHA loan forbearance simply has to submit a request to the mortgage servicer. The borrower must state that they are experiencing a financial hardship due to the coronavirus pandemic. That’s the basic requirement to get the ball rolling.

3. Follow up and be patient.

The process for requesting FHA mortgage forbearance is straightforward in theory, but you’ll have to stay on top of it. You might have a hard time reaching your loan servicer. Most of these companies were overwhelmed with requests when the CARES Act took effect. So they might be backlogged.

CARES Act: Effective Date, Deadlines and Extensions

The CARES Act was signed into law in March of 2020. The original effective period has since come and gone. But portions of the program — including the mortgage forbearance options — have been extended due to the ongoing COVID-19 crisis and resulting economic hardship.

The latest extension pushed the effective data out to March 31, 2021.

In a policy letter published in late January, 2021, HUD officials wrote:

“Through this ML, HUD is extending the date for Mortgagees to approve FHA Borrowers, impacted directly or indirectly by the COVID-19 pandemic, for an initial COVID-19 Forbearance through March 31, 2021.”

That’s the current deadline for FHA mortgage forbearance, as of early February 2021. But the program could be extended again between now and then. It has been extended several times already, so another extension is certainly possible.

Disclaimers: We are an independent publisher. We are not associated with the Federal Housing Administration (FHA) or the Department of Housing and Urban Development (HUD). Our goal is to help publicize and clarify their policies, by putting them into plain language everyone can understand. To learn more about FHA mortgage loan forbearance under the CARES Act, refer to “HUD Mortgagee Letter 2020-06.” You can find it with a Google search.