USDA Announces Loan Forbearance Up to 1 Year
In accordance with the newly-enacted stimulus law, the U.S. Department of Agriculture (USDA) announced today that any borrowers experiencing financial hardship caused by the COVID-19 pandemic shall receive immediate forbearance of their guaranteed loan payment for a period of up to 180 days. In addition, the forbearance period may be extended up to an additional 180 days at the borrower’s request.
This applies to loans taken out under the USDA’s Single Family Housing Guaranteed Loan Program (SFHGLP). The 60-day foreclosure and eviction moratorium for the SFHGLP announced by USDA on March 19 remains unchanged and in effect.
During the two six-month forbearance options outlined above, no accrual of fees, penalties or interest may be charged to the borrower beyond the amounts calculated as if the borrower had made all contractual payments in a timely fashion.
Upon completion of the forbearance, the lender shall communicate with the borrower and determine if the borrower is able to resume making regular contractual payments. If so, the lender shall offer the borrower a written re-payment plan to resolve any amount due, or at the borrower’s request, extend the loan term for a period that is at least the length of the forbearance.
If the lender determines the borrower is financially unable to resume making contractual payments at the end of the forbearance, the borrower shall be evaluated for all available options presented in the Loss Mitigation Guide which is found at Attachment 18-A in Chapter 18 of the USDA 3555 Technical Handbook.
For more information, contact Curtis Milton at NAHB at 1-800-368-5242 x8597.
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