Biden Administration Announces New COVID-19 Relief Measures for FHA, VA and USDA Borrowers
The Biden Administration recently announced additional COVID-19 relief measures for borrowers with loans insured or guaranteed by the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), and the U.S. Department of Agriculture (USDA). The action is intended to bring options for such borrowers “closer in alignment with options for homeowners with mortgages backed by Fannie Mae and Freddie Mac.”
The U.S. Department of Housing and Urban Development (HUD) addresses the relief measures in Mortgagee Letter 2021-18. The measures now include the following loss mitigation options: COVID-19 Forbearance, COVID-19 Advance Loan Modification, COVID-19 Recovery Standalone Partial Claim, COVID-19 Recovery Modification, COVID-19 Recovery Non-Occupant Loan Modification, COVID-19 Pre-Foreclosure Sale, and COVID-19 Deed-in-Lieu of Foreclosure.
The VA addresses the relief measures in Circular 26-21-13, with a graphic version of the home retention waterfall set forth in Exhibit A to the Circular and a side-by-side comparison of the COVID-19 Veterans Assistance Partial Claim Payment and the COVID-19 Refund Modification options set forth in Exhibit B.
Among other relief, the measures provide for a 25% or greater reduction in the monthly principal and interest loan payment for FHA borrowers, a 20% or greater reduction in the monthly principal and interest payment for VA borrowers, and a 20% reduction in the monthly principal and interest payment for USDA borrowers.
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