September 25, 2022

COVID-19 mortgage relief and rental relief programs [Updated for December 2020]

Money tight because of COVID-19? These relief programs can help

There’s a large list of government-sponsored and private relief programs to help U.S. households affected by COVID-19.

Below are financial aid programs currently available to U.S. homeowners, renters, and those who have recently become unemployed.

Note: The response to COVID-19 is constantly evolving. Programs listed here may change, expire, or be extended. This list is current as of December 10, 2020.

In this article (Skip to…)

  • CARES Act protections expiring
  • How to request mortgage relief
  • COVID mortgage relief programs
  • COVID rent relief
  • Unemployment assistance
  • Look out for mortgage relief scams
  • Resources for more information

CARES Act protections expiring on December 31

Since March 2020, homeowners have had certain protections under the CARES Act (Coronavirus Aid, Relief, and Economic Security Act).

These apply to anyone with a mortgage backed by Fannie Mae, Freddie Mac, or the federal government — including FHA, VA, and USDA loans. The key protections are:

  • Homeowners may opt into a forbearance plan, pausing mortgage loan payments for up to 12 months, if they are experiencing financial hardship
  • Mortgage companies cannot start foreclosure proceedings against homeowners until December 31 at the earliest

Note the expiration dates on these programs.

Government-backed loans are currently only protected from foreclosure until December 31. For loans backed by Fannie Mae and Freddie Mac, the foreclosure moratorium was extended to at least January 31, 2021.  

For some government-backed loans, loan forbearance must be requested by December 31. But private banks and lenders may allow forbearance requests beyond that date — so it’s worth asking yours about options.

After these CARES Act protections expire, the availability of mortgage relief will depend on whether or not Congress manages to pass a new relief package. It had not done so at the time of this writing.

How to request mortgage relief

Most help will be available only to those who ask for it. And the organization you need to ask — at least, at first — is your loan servicer. That’s the company to which you make your monthly mortgage payments.

You should work with your loan servicer to discover programs that may help you. 

Not all types of mortgages offer the same relief, and there may be state or local assistance you can tap. 

But don’t rely solely on the knowledge of the agent to whom you speak. Do some research of your own online. You’ll find some links below. And Google could be your friend.

“Loan servicer” vs “lender” — who to call

To get help postponing or reducing your mortgage payments or restructuring your loan, you need to speak to your “mortgage servicer.” This is the company that collects monthly payments and manages your account. 

In many cases, this is not the same company as your mortgage lender or “loan originator” — the company that set up your loan. 

Dig out your last mortgage statement. Whoever you send your payment to is the loan servicer. That’s the number you should call.

Coronavirus mortgage relief programs 

The type of mortgage relief you may be eligible for depends on your loan type and which bank or agency owns your mortgage.

Here are the relief programs currently available for the four major loan programs: conventional, FHA, VA, and USDA.

Mortgage relief for conventional loans (Fannie Mae and Freddie Mac) 

Fannie Mae and Freddie Mac were the first to unveil relief programs for those affected by the coronavirus. 

Many homeowners don’t realize their mortgages are owned by Fannie or Freddie. You may not have noticed that one of them bought your loan after you closed. But you can easily find out using the lookup tool that each of them provides:

  • Fannie Mae Mortgage Loan Lookup
  • Freddie Mac Loan Look-Up Tool

Be sure to use both tools. Either agency could own your mortgage as they own the majority of U.S. home loans.

Providing you agree with your lender on an assistance package, you could be in line for:

  • Mortgage forbearance (reduced or no payments) for up to 12 months
  • Penalties and late fees waived on issues covered by your forbearance agreement
  • No reporting to credit bureaus about late or ‘missing’ loan payments
  • Loan modifications that could allow you the same or lower monthly payments when things return to normal

Under the CARES Act, homeowners do not have to prove that they’re in financial distress in order to get mortgage relief. That means no extensive documentation. 

Homeowners simply have to “claim” they’re going through financial hardship by sending in a hardship letter saying they’ve been affected by COVID-19. 

These programs could offer serious help. Just be aware that there are both pros and cons to forbearance. 

In particular, understand that any money you don’t pay now will have to be paid later. You and your mortgage servicer should be absolutely clear about the timing and terms of repayment once your forbearance period ends.

Homeowners protected under the CARES Act should not be required to pay back missed payments as a lump sum right when forbearance ends.

Instead, you can usually opt to make larger payments until the missed sum is repaid, or ‘defer’ repayment until your loan is fully paid off or you refinance or sell the home.

Mortgage relief for government-backed loans (FHA, VA, USDA)

Under the CARES Act, government-backed loans are also eligible for loan forbearance. 

Just like for conventional loans, those with government-backed loans simply have to ask their lender for forbearance, and send in a letter stating they’re going through financial hardship as a result of the pandemic. 

In this way, government-backed loan holders can get forbearance for up to one year (180 days, plus one extension of 180 days). This applies to:

  • FHA loans 
  • VA loans
  • USDA loans

Remember, you still have to ask for forbearance under the CARES act. It will NOT be automatically applied to any loans. Again, you need to call your mortgage servicer.

Private mortgage relief programs

Even if your mortgage is not government-backed, you may have access to mortgage relief.

Many private mortgage lenders, big and small, have announced help for customers who are financially affected by COVID-19.

The American Bankers Association maintains a list of banks that have announced help for their customers over the pandemic.

Don’t worry if yours isn’t on that list. It may have just neglected to tell the ABA. Call and ask.

When you call or go online, remember the lending industry’s new unofficial slogan: “When people need help, just give them help.” 

It’s never pleasant, sharing your woes with a complete stranger. But now’s the time to set such considerations aside. And certainly don’t wait until things get bad.

Federal and state mortgage relief programs 

If your loan is owned by Fannie Mae or Freddie Mac, you are protected from foreclosure until January 31, 2021. If your loan is backed by the FHA, VA, or USDA, you’re protected until at least December 31.

Until that date, the law prohibits lenders and servicers from beginning a judicial or non-judicial foreclosure against you.

What happens after Jan. 31, 2021? That’s anyone’s guess. Because, of course, a new administration will be in place by then. Many are hoping for further extensions or additional help at the federal level.

Meanwhile, some states have also introduced their own moratoriums on evictions and foreclosures. And they may outlast federal protections.

Find out if there are eviction bans in your state or city.

Relief programs for renters

State bans on evictions apply to renters as well as homeowners. So there are some protections in place, albeit limited ones.

The National Low Income Housing Coalition has a lookup tool that can help renters find state and local assistance. But you must still keep in touch with your landlord if you’re having trouble paying your rent.

Call your landlord ASAP if the coronavirus means you’re sick, laid off, or otherwise unable to pay your rent. 

Remember: If you forestall payments, they’ll likely be due as soon as coronavirus troubles pass. So make sure you and your landlord are clear on two things: 

  • How to handle missed or late rent payments during the COVID-19 pandemic
  • How repayment for missed rent will be handled once the pandemic ends 

Get the agreement in writing if possible. 

Also, research measures your state has enacted to protect renters and make sure your landlord is aware of those. 

Find out if there are eviction bans in your state or city.

Unemployment assistance from state governments

Some states have initiatives to help employers retain workers who’d otherwise be laid off, and to make lives easier for those who have been and are unemployed.

Laid-off workers may be eligible for unemployment income. The amount of unemployment income you’re eligible to receive varies by state.

As of this writing, Congress has not yet passed a second COVID relief package.

The bill currently being debated could include $300 in additional federal unemployment income — but it does not include a second round of stimulus checks.

Visit your state government’s website to see what unemployment assistance is available where you are.

Should you tap your emergency savings?

Many of us have no emergency funds at all. If our income dries up, we won’t be able to make our very next mortgage or rent payment.

But suppose you do have a fund that provides you with a cushion for months to come. There’s no point in having one of those if you don’t use it when there’s an emergency. The clue’s in the name.

However, having said that, we’re as yet unsure about how long the economic effects of COVID-19 will last. 

You may wish to stretch the savings you have by taking advantage of assistance available from your lender and other organizations.

Tap the help that’s available to you now, and save as much of your emergency cash as you can in case it’s needed down the road.

Mortgage modification scams

Unfortunately, some con merchants see this national emergency as an opportunity rather than a tragedy. 

Already, the Consumer Financial Protection Bureau is having to warn Americans about mortgage modification scams. It says:

Scammers may:

  • Ask you to pay fees upfront to receive services
  • Promise to get you a loan modification
  • Ask you to sign over the title to your property
  • Ask you to sign papers that you do not understand
  • Say you should start making payments to someone other than your servicer or lender
  • Tell you to stop making mortgage loan payments altogether

If anyone has made any of these requests or claims, you can report that company by submitting a complaint with the CFPB online or by calling (855) 411-CFPB (2372).

And the Federal Trade Commission reminds us: “The government will not call to ask for your Social Security number, bank account, or credit card number. Anyone who does is a scammer.” 

It warns equally against those asking for any form of upfront payment or promising to get you stimulus money quicker than normal. Again, those are scams.

Trustworthy resources for COVID-19 information

The federal government’s website has a portal to numerous sources of information on COVID-19. Better to rely on them than social media or even some media outlets. 

Among other things, these resources include: 

  • CDC COVID-19 information 
  • Information for seniors and people with disabilities
  • Information for Medicare recipients 
  • Information for Veterans 
  • Guidance for air travel
  • Info about the government’s response to COVID-19

Your state’s website likely has a similar page for local services.

Times are likely to remain hard for many of us. But knowing where we truly stand can make dealing with those easier. 

So whether you need mortgage relief or reassurance about health matters, be sure to choose trustworthy sources — and to ask for help as soon as you think you’re going to need it.