Beginning Aug. 1, the Federal Housing Administration will extend the period for unemployed homeowners to miss mortgage payments from four months to a full year, providing qualified homeowners with more time to find employment before the foreclosure process begins.

Making sense of the story

  • The new Special Forbearance program falls under the FHA’s Loss Mitigation program, which FHA-approved servicers must participate in.
  • The extended grace period only applies to FHA-backed loans and homeowners in the government’s foreclosure prevention program, the Making Home Affordable Program (MHA).
  • In addition to extending the forbearance period and removing the up-front hurdles for borrowers, the FHA also reemphasized its requirement that participating servicers conduct a review at the end of the forbearance period to evaluate the borrower for all additional, applicable foreclosure assistance programs and notify the borrower in writing whether or not he/she qualifies for any other available option.
  • If the borrower does not qualify for any foreclosure assistance option, the servicer must provide the borrower with the reason for denial and allow the borrower at least seven calendar days to submit additional information that may impact the servicer’s evaluation.
  • Housing and Urban Development, which oversees FHA, hopes private lenders and government-controlled Fannie Mae and Freddie Mac will adopt a similar policy.
  • For additional information on the program, including eligibility and requirements, please visit Read the full storyThinking of buying or selling?
    For all your real estate needs, call or email:

    John J. O’Dell Realtor®
    Real Estate Broker
    O’Dell Realty
    9530) 263-1091

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